How to Choose a Business Partner

Choosing a business partner is really not much different to choosing a marriage partner! We need to take our time if we want to be in the relationship for the long ride. And yet when I look around me I wonder if entrepreneurs actually do adequate homework before making such a significant commitment.

The Retailer

Kevin purchased a franchise store over ten years ago. He asked Dave with whom he had previously worked in a large retail business to be his business partner. Kevin has a strong character: he is decisive and a hard negotiator. He loves the thrill of doing business and is the face of the business. Dave is the introvert: the person who manages the financial and administrative side.

The level of trust is high between them. As a result Dave is very comfortable for Kevin to play the leading role. They have come to accept and respect each other’s strengths and weaknesses. The relationship works well. They also did the right thing by drawing up a legal contract for the partnership prior to them going into business.

Kevin thought very carefully about the kind of business partner he wanted when choosing Dave.

The IT company

Paul started his own IT company two years ago. He asked Gary to be his business partner. Paul is a people’s person. He has integrity and is transparent in his interactions.  Paul is a visionary. He is inclined to only see the good in people. Paul would like a strong company culture of enthusiasm and empowerment.  He finds it difficult to take on a strong leadership role and is better at “directing” self-managed teams.

Gary is a good sales person. He is extremely egotistical and has little concern for people.  He continuously challenges Paul’s decisions.  In fact he becomes very destructive and attacking toward Paul.

Initially Paul found himself defending his decisions. He has now realised that a lot has to do with Gary’s own insecurities.

It is exhausting for Paul to manage his relationship with Gary. He is unable to be honest with Gary as the latter reacts by attacking and undermining him. Paul is interested in long-term relationships with clients. So he is very mindful of how he communicates with clients. Gary is only interested in tying up a deal and moving on to the next one. This frustrates Paul and he is concerned about how this affects the company’s reputation.

How much did Paul know about Gary before they went into business together? Did Paul find out how Gary deals with challenges or what his priorities are in life? Etc. Was there a partnership agreement set up with with Gary at the beginning? Does Paul trust Gary?

Some tips on choosing a partner

Based on the two case studies we can take some lessons on choosing a business partner:

  • Find a person who shares similar values to you. If integrity is crucial to you find a partner who feels the same way. Where values are very diverse it is bound to become an issue when deciding on how to do business or interact with clients. Business is about people. And although so much business is quite cut-throat, there are many highly successful business people for whom integrity is essential. Running a business is challenging enough. You do not want a business partner with whom you battle as well.
  • Can you trust your partner? Trust is probably the most important factor in a partnership. If you are continuously unsure of what your partner is doing or how they are approaching situations this will impact negatively on your business.
  • Draw up a partnership agreement at the beginning of the relationship. An agreement sets out roles and responsibilities. It also stipulates the financial side of the partnership and procedures should there be reason to terminate the partnership. It is preferable to do this at the beginning before problems arise. Unfortunately when relationships sour the split can become highly acrimonious.
  • Understand the personality and character of your potential business partner. Make an effort to find out what the person is like under times of stress. How do they respond to challenges? What are their vulnerabilities? How will this potentially affect working with them?

If you are thinking seriously of taking in a business partner, you definitely would benefit from some business coaching. Rather err on taking your time before making a crucial decision. A poor decision will place your mental and emotional well-being at risk in the long run.


Posted in Business, Entrepreneur.