How to Choose a Business Partner?

Not everyone has the judgment, interest, commitment, dedication and objectivity to make decisions.

Choose a business partner

One of the topics that I am consulted the most is about business partners. It is easier to move forward if you have a good business partner, but, if you do not choose it well, it is easier to fall, therefore, I will share some aspects that you should consider before choosing a partner.

But, before this, the first thing you have to ask yourself is the following question: Do I really need a partner? Because I say this because one of the most frequent mistakes of entrepreneurs is to start a business when it is not really necessary. A partner will be involved in the decisions of the company and will get a share of the results and those are two places where things get stuck.

Not everyone has the judgment, interest, commitment, dedication, and objectivity to make decisions and on the other hand, everyone wants a piece of the pie when there are profits, but, when there are losses, not everyone wants to contribute to the survival of the business. So some of the questions you should ask yourself before choosing a partner are:

  • Do I need a partner to contribute capital or can I solve it with a loan?
  • Do I need a partner to operate the company with me or is it better to hire someone?
  • Do I need a partner who brings knowledge and experience or can I hire an expert to advise me?

If after asking you these questions, your answer is yes I need a partner. Here are 5 things you need to consider:

  1. Have successful experience in the industry: Your partner needs to add tangible value to the organization, whether it’s because they have access to customers, technology, capital, or key players. It has to be someone with a verifiable success story, someone who helps you strengthen the competitive advantages of the business, someone who thinks in the same direction and has the good judgment to make decisions.
  2. That you have integrity, values, and good reputation: the greatest number of problems arise at this level, therefore, your partner should be a person who has solid values and is verifiable by their history. I recommend that you know a little about his environment, how he develops, and what people think of him or her when doing business, that will save you a lot of headaches.
  3. That you are committed to the business: this must not only be of words but also of time and resources. If your partner is not passionate about the industry, the way of doing things, and the reason for the existence of the organization, sooner or later he will move away from it and you will have more problems.
  4. That he can handle difficult situations: you need him to behave in difficult situations properly, investigate how he has handled previous situations, simulate something, if you wish. This is one of the most important fundamentals, because when situations get difficult and you want a backup, sometimes, people run away.
  5. That you have a good financial situation: it is important that your partner has healthy finances, since the way he manages his money, will be the way he manages the company. This is one of the reasons why I have many business partners in my seminars, financial problems sooner or later take the organization into a tie.

Once you check if you meet these 5 criteria, you need to put everything in writing and in a contract. I recommend that there is always a partner with a higher percentage so that he has the last word and if you invited him, you must be that person.