7 Things to Ask a Potential Partner

In starting a business, one of the first and most important decisions
you can make is choosing the right partners. The success or failure of
a new venture often hinges on the performance of the founding
team–their mix of skills determines whether they can manage the
diverse challenges they will face, their ability to support and
challenge each other will decide how well they manage setbacks, and
the culture they create through their interactions will have a lasting
impact on the company.  Choosing a partner should be a difficult and
time-consuming decision.   What follows are seven questions you should
ask a potential partner before deciding to drive a new venture
forward.

1. How well do you know your partner?
Business partnerships are often equated to marriages. Knowing your
partner can eliminate many future uncertainties and headaches.
Whether you are partnering with a coworker, friend or family member,
make sure you really know your partner’s strengths, weaknesses, work
ethics, and family and financial obligations. Going with your gut–or
with longtime friends–can often backfire as we tend to focus on the
positive aspects of the relationship and ignore and underestimate the
warning signs. Asking  tough questions of each other in the beginning
will avoid potential  disaster in the long run.

2. What strengths and weaknesses do you both bring to the partnership?
Opposites attract. A good partner will complement your skills and
assets. Though you may share the same visions, having a partner with a
different skill set will enable you to double your strengths and
minimize your weaknesses.  Choose a partner that is able to challenge
your viewpoint and strategy, in an effort to find the best possible
solution.

3. Do you have a shared vision?
Although a strong partnership will often consist of two people with
different but complementary skills, sharing a common vision gives the
partnership focus, drive and ambition. Make sure ahead of time that
both parties are committed to the partnership’s success and are willing
to invest the necessary time, energy and money required.

4. What type of partnership will you form?
Put your legal affairs in order. Even partnerships with the best of
intentions can fail miserably if the proper legal agreements are put
down on paper.  At first, begin by putting in writing such things as
expectations (and agreements) about profit-sharing or ownership. Then
answer the harder questions: How will decisions be made (easy if you
agree, not so if you don’t)?  What will happen if one of you decides
to leave the business? Whether for professional or personal reasons,
this happens often); In the event of one’s death, how is ownership and
control going to be determined?

5. Do you like this person?
Liking your partner is essential to your partnership’s success. Much
like a marriage, a long-term partnership will suffer the same ups and
downs. Make sure this is someone you like enough to want to weather
through adversity when the going gets tough.

6. If your partner is a friend, how strong is your friendship?
Partnership with a friend can be fun and rewarding but also brings the
possibility of greater devastation. If the partnership fails, chances
are the friendship may as well. Decide ahead of time if your
friendship can withstand the inevitable disagreements, downturns, and
even dissolution of the business.

7.   What is the exit strategy?
Before the ink even dries on the partnership papers, sit down and
decide what the exit strategy will be. Having this conversation ahead
of time can prevent heartache and dissension in the future. Decide
how, when and why the partnership will dissolve. A well-thought out
exit strategy can allow partners to exit a partnership gracefully and
with dignity, rather than with recriminations and regret.

         

One thought on “7 Things to Ask a Potential Partner

  1. Very good points. In some ways the last is most important – in fact, don’t enter into a partnership until you figure out what the ideal exit is for all parties involved.

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