Managing Your Business
Picking a Business Partner: How to Know When It's the Right Fit
Do You Want to Go Solo or Share the Ride?
When Andrew Rice decided to start a luxury magazine in 2008, he knew he couldn't handle the venture alone, so he brought in a partner. But as the economy soured, so did the relationship.
"He was drawing a salary, but he didn't add much in terms of operating the business," Rice recalls. "Because the magazine was very cash intensive, that stung. Eventually, I was the one who decided to close it down. He's a super guy and I really like him, but the partnership just didn't work."
Much like some romantic relationships, some business partnerships can begin with affection and end with slamming doors. "It's like choosing a spouse, except harder," says John Eliason, author of Rewire: How to Grow Business in a Crazy World and Have a Great Time Doing It.
So, how can a small business owner or entrepreneur make a connection that endures? Eliason offers these tips for finding the right fit:
1. Assess the Need
Small business founders, like Rice, may assume that a partner is necessary to help the company grow. Eliason says that's not always true. "Don't automatically go looking for a partner," he advises. "Know your reasons for wanting a partnership first" and compare your short- and long-term goals to your skill gaps to see where a partner might create advantages.
2. Choose Complementary Skills
When Eliason was building a team for his own business, he says he chose partners and employees who shared his skill for creative sales strategies. With no one to manage the results, the venture suffered. "Don't choose people who are exactly like you and have your talents," he says. "Balance out the business with someone who's good at what you struggle with."
3. Keep the Conversation Flowing
Every relationship, whether marital, platonic or entrepreneurial, has its fantastic days and its not-so-wonderful days. Staying together in a partnership means handling both extremes appropriately, with regular discussions about what's going right, and especially, what isn't, says Eliason. "In any partnership, you should be able to have hard conversations. There will be stress, conflict and tough times. How you handle it together will show you whether the relationship is built for the long haul."
4 . Have an Exit Strategy
People don't generally discuss divorce when planning a wedding, but in a business partnership, both sides should be realistic about how long it might last. "Start a partnership by figuring out how to unwind it in the future and maybe even establish that timeframe," Eliason advises. Being able to talk about a possible end to the arrangement without hurt feelings or anxiety is a mark of a strong partnership, he says.
Even those who've been through rough breakups, like Rice, can appreciate the appeal of a rock-solid partnership. With his new company, a marketing firm called DigitalParc, Rice is on his own but says he's open to the possibility of a partnership."I think if the right person came along, I would still consider it," he says. "Partnerships offer so many advantages in terms of sharing the workload and spurring growth. But the key, really, is to make sure it's what you need, when you need it."
Read all of our stories on establishing trust among your team:
- Keeping Customers Happy: How to Manage Expectations
- Building Trust: Finding Employees You Can Count On
- Picking Leaders: Identifying People Who Can Push Your Business Forward
For everything your business needs in one place, from news and expert tips to valuable products and solutions, visit chase.com/forbusiness.
Elizabeth Millard is a freelance writer whose work has appeared in Entrepreneur, BusinessWeek and Delta Sky Magazine, among other publications.