Once upon a time, after working very long days and weekends, I concluded I was more than ready for a business partner. I felt a partner would divide the workload, add new skill sets, contribute to the vision with new ideas and insights, increase capital, and add new contacts, clients, vendors, etc. Seems reasonable, right? Yes. But easy? Not so much. Despite all the available advice sometimes you just have to learn the hard way—and I did.
I engaged with multiple potential partners in my quest to find the right fit. Like a marriage, partners start off exciting but then the shininess wears off and you get to the real stuff. Some work and some end up in court. I learned just how important it is to know everything about a potential partner—from finances to family to compatibility.
One of my potential partner candidates was Nellie… Nightmare Nellie. She lived in my community and our paths crossed occasionally. Nellie had a recruiting business and struggled with too much to do and too little time. We started working together as a “trial” to test the waters.
Nellie and I were so excited at first. As individuals we were successful, but combined we were going to rock it! Turns out I learned more about what not to do. It seems Nellie cut too many corners and made some very unwise decisions resulting in her spending more time in front of attorneys than with customers.
The last couple of months of our trial I began to notice things that were very unsettling. In business discussions Nellie left no room for compromise and was very controlling. She became hard to track down and would take off on long weekends going radio silent.
She wasn’t following up on agreed upon tasks. Once when I suggested we meet to discuss our annual goals she replied, “I don’t make goals because I just feel disappointed when I don’t meet them.” In the 5 months that Nellie and I worked together, she never signed on a single new client—part of the agreement. Not one.
You don’t want a carbon copy of yourself. Find someone who can complement and enrich your business from a skills and personality perspective.
Choosing the right business partner is one of the most important decisions you will ever make, so before you walk down the aisle consider these critical factors:
Diverse But Complementary Skill Set
Part of a good partnership is working with someone that brings a certain skill set that you currently lack in your organization. You don’t want a carbon copy of yourself. Find someone who can complement and enrich your business from a skills and personality perspective. Select a business partner who can fill in the gaps and take your place in front of employees or clients when needed.
Financial
Know your partner’s financial status, both past, and present. Current financial commitments will affect and shape the business’s decisions going forward. Past financial events will reveal possible trends or patterns and help you to identify the overall character and decision making of the individual. Have they ever filed bankruptcy? What is their credit rating? Have they ever defaulted on a loan? What is their debt today? This was a huge red area with Nellie. The more I got to know her the more I learned that she was fiscally irresponsible and made some very poor choices.
Personal Life
Evaluate a potential partner’s personal life and their commitment to the business. Is their commitment as strong as yours? You don’t want the business to be an afterthought or a secondary interest. Flush out time expectations and be brutally honest. Elderly parents, sick spouses, children, side businesses, can all be huge distractions. Be sure you are on the same page from the beginning or the results will be disastrous.
Sadly Nellie’s personal life was a mess. Two divorces, a troubled teen, debt, and lawsuits just don’t add up to a stable partnership. If your partner fails at relationships in their personal life then chances are they will fail with you and with your customers.
Reputation
After I learned more about Nellie I couldn’t run away fast enough. I wanted a trusted business partner not a contestant for The Housewives of NC. Look at your potential partner’s standing in the community and talk to former employees and clients. Partners that can’t meet deadlines, follow up with clients, or follow through with their responsibilities can destroy everything you’ve built. If your partner dances with the law, churns through employees, behaves inappropriately with clients or disrespects customers, their actions will come back to haunt you and impact your business.
Partners that can’t meet deadlines, follow up with clients, or follow through with their responsibilities can destroy everything you’ve built.
Put Everything In Writing
And I mean everything. Nellie and I weren’t ready to declare a partnership until after we completed our trial. We had little in writing and it was a real mess in the end. Spell out any financials, expectations, consequences for failure, and conflict resolution procedures. Partner disagreements consume resources, cause stress, and eat up valuable time. Having agreements in writing minimizes misunderstandings and will give you some legal footing.
Try Before You Buy
A business partnership is like a marriage, and it’s imperative that you pursue a courtship process that allows you to verify they are who they say they are. Live together first to uncover the real person.
Always Plan Your Divorce/Exit Strategy
Don’t forget your prenuptial. No one wants to start off a partnership with negative talk, but failing to discuss your exit strategy is a mistake.
Determine how to handle buy offers, life event changes like death and illness, and irreconcilable differences. An attorney can help you work through some of the common problems and put a framework in place to help address certain circumstances.
Not all partnerships have to be a Nightmare Nellie. Building a successful partnership takes work. A great deal of soul searching should be done and solid written financial and operational agreements must be in place before the champagne is popped. So, before taking on your partner, make sure you’ve explored these crucial considerations in detail. Otherwise, you may be drinking for different reasons.
Tricia Lucas, Co-Founder of Lucas Select, has over 25 years of demonstrated success in recruiting, marketing communications, social media, technical sales, business development, and project management. Tricia has been involved in 9 start-up technology companies as well as sales and marketing roles at IBM, QMS-Minolta, SAS, and most recently Lucas Select, sales and IT recruiting and consulting company to help organizations recruit more efficiently by focusing on: Recruiting Efficiencies, Employer Branding, and Social Media.
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