Traits of a Good Business Partner

Going into business for yourself is challenging enough when you consider the processes, the financials, and personnel issues. You’ve enough on your plate seeing your patients and running a business. What you don’t need is a lousy business partner who causes you enormous headaches and takes more than they contribute to the practice. 

Picking the right business partner is one of the most important decisions you will make as a business owner. Most of the issues can be identified early in the process of selecting a partner. The key is knowing who they are, performing your due diligence. Picking your business partner and life partner are serious decisions that should not be taken lightly nor nonchalantly. Even though you’re excited about the venture, keep in mind that it too, like a marriage, can end in heartache, lawsuits, and even bankruptcy. 

Before you sign on the dotted line and join forces (and assets) with someone, consider the values, goals, skills, and experience the other person offers. To help you pick the right business partner, find the following traits in that potential partner.

You must trust them. If there are any little voices in the back of your head asking you to tap the brakes, stop and listen. Are you willing to share your personal checking account with them or even a credit card? Because as a business partner, that’s precisely what you’re doing. Can you trust them with the assets of the company? If there’s a hint of “no,” stop and think twice about the deal. 

It’s good to be friends. There are varying levels of friendship with a business partner. However, it’s probably best to be friendly with each other. If you cannot tolerate a behavior or leadership style, you will not change that. Don’t think you can change a friend into something you want. People are people and not likely to change. Also, don’t assume since you’re friends, you will always see eye-to-eye in your decisions. Sometimes the strain of the friendship can and will affect the business. 

Do some digging. If you’re not all that friendly or don’t know them that well, do some digging, don’t assume because they look good on paper that’s all there is. Examine their personal life and choices. Is their own life stable? Their personal problems can sometimes become your problems, too, when they are able to drag your business into their chaos. 

Their strengths complement your weaknesses. Ensure you and your potential partner have strength in unique areas. It’s okay for some overlap, but you want there to be a good spread across the various duties and responsibilities. If you’re good at the financial and operational matters but stink at negotiations or sales, then look for a partner who can complement your areas of weakness. A balance is best when you’re trying to grow a business and be profitable.

Determine their role. Sometimes you might be tempted to offer ownership in your company in exchange for work. For example, you cannot afford to hire the individual, so you offer them a stake in your business. You aren’t looking for a partner in a situation like this; you’re looking for an employee or consultant. You’ll be better off if you hire them first, and if they become a critical member of the company, then it’s fair to offer them a stake.

Outline the responsibilities. You should determine who is responsible for what in the business and hold each other accountable. If one person lets things slip or even encroaches into your area, a situation primed for hard feelings is about to explode. 

Show me the money. Perhaps the most significant stressor in any relationship or business is money, or the lack thereof. Always have candid talks about who is contributing how much and what that money will be used for. Be sure you are both on the same page when raising capital. Are you both going to kick in some cash, or will you take on debt instead? You both should be likeminded when it comes to the capital structure of your business. 

The next time you are looking for a partner, examine these areas, and see how you score. After some due diligence and energy, you know if you’ve got the right business partner or not, and hopefully, it’s before you’ve signed any agreements.

If you would like help, please contact me at www.davidnorrismdmba.com or through my LinkedIn page.