Here are some thoughts on the pros and cons of having a business partner.
I’ve worked with hundreds of businesses over the years as a business coach. A lot of these companies have been run by two people. Sometimes, these two people have been married to each other as well as being business partners.
And I had a previous business myself, with two business partners. As both of them turned on me when business got difficult, I’ve become acutely aware of the downside of having business partners.
Fortunately the successful business partnerships I’ve worked with have taught me that it can work.
Here are my thoughts on the pros and the cons of having a business partner
The pros of having a business partner
Here are the good things:
- You have somebody to talk to about the business. This, of course, can also be achieved by having an excellent business coach, so you want to make sure that any business partner is going to bring something more than just talking it through.
- A business partner who can have complementary skills to you. But don’t just look for somebody to fill the gaps. And don’t look for somebody who will fill the holes that are only there because you haven’t learnt those skills yet. Or you’re scared of doing those things.
- You can pick a business partner who has a complementary personality type to you. Some of the successful business partnerships that I’ve met have been where one partner is very gung-ho and up for taking risks to move the business forward, and the other is more strategic and wants to think things through and do the cash flow plan first.
- What about a business partner who has money to invest? This can work well, as long as you both have other things to contribute as well. In a situation where only one person is bringing money to the table, this can result in an unequal power relationship, and an unhealthy working dynamic.
- You can pick somebody who already has a similar business and join forces with them. This can be an excellent way for both of you in moving ahead more quickly. But I would advise a lot of talking upfront to make sure that you’re both clear what kind of new business you’re going to create by putting the two companies together. I would advise booking one of my one-off sessions so that I can help you to have that discussion, and you don’t regret your decision in two years.
- You can look for a business partner who you already know well, and that you can work together. They might be somebody that you have worked with, in a previous company. Or they might be your husband or wife.
- It can be great if you find somebody who has lots of good ideas, and, the ability to put them into action. It’s the second of these which is important. Anyone can have good suggestions, but running a business is all about putting those ideas into action and following them through.
The cons of having a business partner
Here’s are some of the things that you might want to look out for when you want to look for a business partner.
- You have to share the profits. This can be a big downside. You need to weigh up whether you would be at least doubly successful financially with this person than without them. What are they bringing to the table, that you couldn’t get from external advice or just by going it alone? Here are some tips on giving shares to business partners.
- If a prospective business partner has a very different personality type to you, make sure that you can get on with them. If you’re very introverted, it’s more difficult to find successful ways of working with somebody who is very extroverted. They might be very loud and annoying. Their extroversion may be a big plus point if you want them to go out and be customer facing, but make sure that they can do this in a different room to you if this is going to get on your nerves.
- When you’re thinking about going into business with your husband/wife/girlfriend/boyfriend or a close family member, think carefully about how you will be able to separate your non-business relationship. You don’t want to risk ruining your business and your marriage all at the same time.
- Protect yourself and make sure that you have a way out if you end up in a fight like these guys
They might have very different values to you
I think this is the fundamentally most important point in looking for a business partner.
It can be useful to run through some “what-if” scenarios to find out if you have the same values.
You might think this seems ridiculous, especially if you know the person well already. But it’s only too easy to assume that people have the same values as ourselves, only to find out later that they love Donald Trump, while you have fantasies about assassinating him. And people might have similar values politically, or similar tastes in art and music, but have very different attitudes towards how to run a business.
While it’s perfectly possible to run a great business partnership with someone who doesn’t share all of your musical choices, or how you vote, you have to be aligned on your key business strategy, and what kind of a business you want to create.
What to do if you’re thinking about looking for a business partner
If you want to talk through the pros and cons of having a business partner and want to think through the implications, we can schedule a session.
Or you think you’ve found a potential business partner and you would like to talk through the idea with them, but with me as a mediator, you can book a couple of hours with me to dig into all of this and work out if this is the best way forward.
That could be the best £300 your business has ever spent, especially if it saves you getting embroiled with the wrong person.
Here’s how to schedule a time to talk, either face to face or on Zoom.
Details to discuss with your business partner:
When you’ve weighed up the pros and cons of having a business partner, and you’re going to go ahead and either form a company with the two of you or bring them into your business, you need to think about how the equity is going to be divided up. Clue – it doesn’t always have to be 50:50.
How to give shares in your business (lots of great tips on the practical elements of this in this article)