Won’t You Be My Partner? Finding the Best Partner for Your Small Business

If you are considering your own business, but you feel you don’t have all the skills required to run that business, perhaps you should think about a partnership.

Getting a partner for your business might be as close as your co-worker who has the same interest, or it might require placing an ad in a trade journal, talking to other people in the industry or formally searching through a business organization. 

If you already own your own small business and you are struggling to get it all done, or you feel you are letting certain things slip or doing certain tasks poorly, you may also want to consider a partner or a partnership. 

The other reason you might consider a partnership for your small business, is to get an influx of cash for investment and business growth.  In other words, your business may be doing just fine with you at the helm, and your only reason to consider a partnership may be to have more resources with which to grow.

Whatever your reasons for wanting a partnership, there are a few things to consider before you sign on the dotted line to get a partner on board.

• What gaps do you need filled in your business and management structure?  Can one person fill all the skills, investment and management gaps or should you be looking for a larger partnership to satisfy all of your needs
   
• Will the person or company with whom you partner be investing cash in your business, or do they have a network of contacts or some other benefit that will bring you more money for growth or more customers for income?
   
• Will you ask your new partner to take risk along with you?  Do you have existing loans and collateral pledged to banks or investors?  Will your partner be equally responsible for these, or just for new loans and obligations you may take on after your partner joins you in the business?
   
• Will one of you have more share or interest in the company, and thereby be the major shareholder with more decision-making power?
   
• Does your new partner have written obligations in the form of a contract?  You should always seal your partnership with a legal contract that binds and describes the obligations of all parties. 
   
• Does your new partner have complimentary skills or knowledge or are you merely duplicating your own skills and knowledge as back up?  Is this arrangement the one that best suits your business need?
   
• Who will hire and fire employees?  Who will make decisions about new products and services?  Are all decisions equally shared? If you have a specialty in which you want sole decision-making responsibility, have you articulated that in your contract?
   
• Have you spoken to your business lawyer and/or accountant about this potential partnership?  What concerns do they have?
   
• Have you answered all of the questions your investors and/or bankers may have about the potential partnership issues that may arise?

There are many more questions you might ask before signing a partnership agreement.  Not the least of these questions is the very real emotional and moral commitment your partner may or may not have to your business.

Remember that your business is your passion.  Be sure that it is also your partner’s passion and that he or she is willing to stick with it during good times and bad times, and to work as hard as you will work to make the business a success.  If you have any doubt of this commitment, don’t sign the contract!

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