It’s important to know as much as possible about a potential partner, including how his or her finances and family life may affect the business, before signing on the dotted line.
Here are some questions to ask before deciding if partnering is a good idea:
1. What do I need from a business partner?
You should look for a business partner who brings something different to the table than you do. If you’re creative, maybe you need a more detail-oriented partner. If you have money to invest in the business, you may want to look for a partner with access to a market, or with great connections.
Or if you’re shy, you might need a good “people person” to balance the equation. “If they’re similar to you, it might be more comfortable, but it may not be what you need,” says William M. Moore, founder of the Moore Firm in San Diego, a law firm that serves entrepreneurs. “You need someone who complements your skills and personality.”
2. What is your potential partner’s financial situation?
It is important to have an understanding of someone’s financial status and commitments before getting into a venture together. “It is tough to ask what they are currently spending on a house or in payments to an ex-spouse, but someone’s prior financial commitments shape the decisions they will make in the short term,” says Gregory Kratofil, an attorney and shareholder with the law firm Polsinelli Shughart in Kansas City, Missouri, who specialises in small business interests. “If he has large outstanding obligations, but says he can get by on R140 000 salary, it is a red flag.”
3. What are the potential partner’s expectations on the time involved?
Partners don’t have to spend the same amount of time, but it is important that they are on the same page as to each other’s expected time commitments. How many hours a day does your partner expect to put into the venture, and do his expectations meet yours?
“It is equally important to level set your partner’s expectations on your time commitments,” Kratofil says. “The age old adage that it’s better to under-promise and over-deliver applies here.”
4. Is your potential partner’s commitment to the business as strong as yours?
“I don’t care if it’s a coffee house or a design firm, the business partner’s commitment has to equal yours,” says Bob Phibbs, consultant and CEO of The Retail Doctor, a site that provides information to small and medium-sized businesses. A partnership – especially one between friends – can start off with fun and excitement, but within a short time, the slog of every day catches up with you. If they’re not as committed to the business as you, they may lose their enthusiasm and may actually be damaging the brand every time you open your doors.
5. Is there something in your potential partner’s family life that might make the business a secondary interest?
If your potential partner has a pregnant wife or is taking care of an elderly parent, he may be distracted from the business. That’s why you have to be brutally honest when thinking of forming a partnership. “The partner can say, ‘My wife is behind me 100 percent.’ But I want to talk to the wife,” Phibbs says. “If they’re too distracted by a family issue or their family isn’t behind them, the business may be doomed from the start.”
6. How would he or she handle a tough situation?
It’s important to know what your potential business partner will do if he has his back up against the wall – and it will happen, Phibbs says. The best way to discover this is to look at what he’s done in past business ventures. If he couldn’t meet payroll, for example:
Did he do the right thing and dip into savings or borrow from a credit card or a friend? Or did he pay employees late, or not at all? Or worse, did he skip paying payroll taxes? It all comes down to character issue, Phibbs says, adding, “Payroll taxes are a federal obligation. If that’s negotiable, you can bet your partnership is also negotiable.”
7. What questions do they have for me?
If a potential employee doesn’t ask any questions in a job interview, you might be less likely to hire him because of a perceived lack of interest. The same applies to a potential business partner, who should want to know about your character, reliability and expectations.
“I want them to ask me the same tough questions I ask them. If they say it doesn’t really matter, it could mean two things: their expectations are too high or they might be kind of flighty,” Phibbs says. “Things may be fine now, but in a month or two, they may want to change things or even get out of the deal.”
8. What is the potential partner’s standing in the community?
A lot of people seem good at first, but that may be their skill – seeming good at first, Moore says. Once they get their foot in the door, it may be difficult to get them out. Talk to former employees to see what they were like to work with, or for. If you’re looking for someone with money connections, verify that they have money.
If they say they have great connections, see if those connections go beyond just being recognised and given a slap on the back. “A business partnership is not a marriage, but there should be some sort of courtship process that you can verify that they are who they say they are,” Moore says.
9. Are they willing to put everything in writing?
Many partnerships are cemented with a handshake, but this can be a recipe for disaster. It’s crucial to put it on paper – not only what is expected of each partner, but the consequences if expectations aren’t met. “There’s something about actually putting it in writing that exposes the potential problem areas in the partnership,” Moore says.
If someone has a family emergency and disappears the first six months of the business – even though it may not be through any fault of his own – are you still expected to give that person a certain percentage of the business?
“If someone simply isn’t pulling his or her weight, you need to be able to get them out without destroying the business,” he adds. “And if it’s in writing, there’s no arguing it.”
10. Do I really need a partner?
If you can get someone to do something without giving them a stake in your business, it’s always better, Moore says. People get wrapped up in the idea of needing to work with someone, but it’s not always a good idea. Sometimes you need somebody to show up from 9-5, work hard and go home, he says, adding.
“If you’re cash poor, or it’s a start-up and you don’t expect to make money right away, taking on a partner might be the better option. But if you can just pay somebody to show up and work, it’s generally a better option than giving them a stake in the company.”
And now a bonus question….
What happens if we can’t work it out?
Most people don’t envision the rough times ahead for a new venture, so this question is probably the hardest to remember to ask and the beginning. Yet, the best time to address potential problems with your partner is at the beginning before emotions run high.
“You can’t predict every potential problem, but a good start-up lawyer can help you work through some of the common problems and put a framework in place to help address unforeseen circumstances,” Kratofil says.
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The Essential Elements of Working With a Partner. Don’t Miss These Tips
Public Private Partnerships Can Work For Entrepreneurs
Property Point will develop 16 small business in the property sector of which two thirds are youth and women owned.
In a landmark partnership for collective economic growth in South Africa, the Department of Small Business Development (DSBD) joined forces with Property Point, a Growthpoint Properties initiative, to develop more small businesses for South Africa’s property sector. DSBD has allocated a R5 million grant to Property Point for a one-year small business development programme as part of its Enterprise Incubation Programme (EIP). This breakthrough initiative is the first public-private partnership of its kind in the property sector. It will develop 16 small businesses in the property sector of which two thirds are youth and woman-owned.
For this unique 16-business intake, Property Point’s programme is powerfully market driven. It will raise the profile of the entrepreneurs and strengthen their competitiveness, with a deep focus on market integration. The programme aims to create market linkages for these small businesses that will see them included in procurement opportunities in the broader property sector, as well as Growthpoint. It is expected to set new benchmarks for small business integration into private sector supply chains.
Estienne de Klerk, CEO of Growthpoint South Africa, says: “We believe in the principles of social and economic transformation and empowerment on all levels, and we are committed to achieving this. As a hands-on property owner, we own and manage our buildings – we recognise our unique position to develop small businesses to increase their access to market opportunities. We are proud to contribute to this pioneering public-private partnership designed to deliver on South Africa’s transformation, small business, economic growth and job creation objectives.”
Shawn Theunissen, head of Property Point and head of Corporate Social Responsibility for Growthpoint Properties, says:
“Property Point’s objective has always been to contribute to South Africa’s economic growth. Using a best practice model, we have delivered positive results in our new partnership with government. This will escalate our impact on transforming the economy at a crucial time when South Africa is dealing with high unemployment and low economic growth.”
The beneficiaries of the Property Point and DSBD partnership have advice on how other entrepreneurs can make the most out of similar programmes:
Advice from Zoleka Ngema of Senzee Trading
- Be honest this helps you define your position and helps you view the real issues in your business.
- Do every task diligently every business is different and what works for one might not work for you, so working diligently personifies the tasks and therefore adds value to your business.
- Lessons are continuous remember & do the tasks done as these will create a cycle of growth even after the course is over.
Advice from Sibongile Shikwambana of Sandwind Coatings
- Be fully present, participate and take advantage of every single opportunity
- Drive your own business agenda; recognise that you and no one else can make your business successful
- Build and maintain meaningful relationships.
Advice from Teko Motlhabi of Techmo Air
- Try to be present and involved with all the activities and opportunities handed to you
- Ask for help from the Programme Managers and the rest of the team when you need it
- Create relationships with your fellow entrepreneurs and collaborate.
How To Partner Successfully With A Younger Boss
Age sometimes seems a lot more than just a number
Just a few years ago, millennials surpassed Generation Xers to become the largest cohort in the United States workforce, according to PEW research. As a result, more and more young people are assuming positions of management.
Being managed by someone younger can feel uncomfortable.
I have to admit, I get into the habit of comparing myself to other people. Those who are younger than us who have advanced further professionally can make us feel inadequate or resentful.
At one of the start-ups where I worked, one co-founder was a decade younger than me. At first I felt awkward with the heavy slate of marketing, sales and social media duties she assigned me. It wasn’t too long, though, before we settled into a groove and formed a strong working relationship.
Creating a bond with a younger manager can have significant positive effects on your own career. Here’s how you should manage it:
Identify skills that helped your boss advance and develop them in yourself
Even innovative businesses will adhere to rules of thumb. One rule of thumb many business leaders believe, rightly or wrongly, is that experience is valuable in and of itself. If your manager is younger than you, it means she probably had to overcome stereotypes and false assessments to get there.
Rather than assume your manager is a young punk who had a managerial role handed to her, work on identifying the skills that helped your boss to succeed. By developing the same skills within yourself, you’ll be more likely to enter a managerial role as well.
To get started, consider asking your manager point blank to identify the skills that she thinks were most useful in propelling her career forward. Once identified, make it clear that it’s a goal to develop those same skills within yourself. A good manager will take this conversation as a sign that you are a driven professional.
Alternatively, you could have a conversation with the person who decided to promote your manager in the first place. As long as you position your question to ensure that it sounds like it’s coming from a good place, the senior manager should have no problem sharing this information with you.
Think of your relationship as a partnership
Your manager is not your parent or your babysitter. If it feels as though your manager is overbearing, have a conversation with her about it. Otherwise, you should treat the relationship you have with your manager as a partnership.
Chances are you are both being evaluated on the same or similar metrics. If you fail, your manager fails, and if your manager fails, you fail. By changing your perspective on this important professional relationship, you may find working with a manager who is younger than you to be more comfortable.
Related: Build Better Business Relationships
Most managers simply want to ensure that whatever they’re working on is completed in the best way possible. They’ll be happy to work with employees who are collaborative, open to new ideas and motivated to get the job done.
In return, a manager who is satisfied with your work can make it more likely that you will also find yourself in a management role someday. If nothing else, you can consider leaving your current company and listing your current manager as a reference if you are able to develop a strong relationship.
Trade experience for new ideas
Both you and your manager have important knowledge that can be made more valuable when put together. You probably have accumulated wisdom from on the job experience, and your manager might have a fresh perspective or innovative new ideas.
Together wisdom and innovation can form a valuable pair that propels both you and your manager to success.
Make sure you make it clear that you are open to new perspectives and new ideas, and offer your experience when appropriate to guide your manager to making smarter choices.
Encourage open feedback in both directions
Feedback is a critical component of professional growth. So much so that companies like Goldman Sachs are overhauling their feedback processes to boost employee performance. As a younger manager, she may feel anxious or conflicted about providing you with honest feedback. Instead, “manage up” and invite your manager to provide you with honest feedback.
In doing so, you will also set expectations that your manager should invite candidate feedback from you as well. By creating open dialogue between you and your manager, you’ll accelerate your professional learning curve and avoid passive aggressive moments.
Though your manager may be younger than you, she earned the privilege of managing a team for a reason. As an ambitious professional, it’s your job to understand why your manager earned that role and to begin cultivating the same skills within yourself.
Instead of feeling resentful, partner with your manager to share feedback and wisdom as you both work to achieve success.
By committing yourself to professional self-improvement, you may soon find yourself managing your own team of people who are older than you.
This article was originally posted here on Entrepreneur.com.
The Case For A Business Partner Who Makes You Uncomfortable
Should you even have a comfort zone?
As humans, we love living within our comfort zone. Science tells us that our comfort zones are a place where activities and experiences fit a pattern and a routine that we’re used to. It’s a place of minimum risk for us, which is why it feels so good to stay in that bubble. The idea of adding experiences and actions that could be stressful, lead to failure or worse is not appealing to our minds. So, we get into comfortable routines and rationalise why we are not doing all the things we’ve dreamt and talked about doing in our businesses. This is a familiar pattern that we’ve repeated most of our adult life.
As you grow a business, there comes a point where it makes sense to bring in others who could help the business grow.
This could be a business partner, it could be a board of advisors, or it can be contractors that do tasks we’re not qualified to do. There is a safe route where you can bring in only what makes you comfortable and only entrepreneurs that are YES people – they agree with what you do and say even though they know it’s not right. Or, you can take a different path. You can explore the zone right outside of your comfort zone.
Charlie Munger is the vice chairman of Berkshire Hathaway. Warren Buffet describes him as “his partner.” They have been in business together for 56 years.
Munger has been quoted saying, “we don’t agree totally on everything, and yet we’re quite respectful of one another.”
Over the years, the advice Munger has given Buffet has not been as a yes man to Buffet, and for that reason, both have flourished. They’ve built an amazing company that keeps growing every year.
In April of 1975, Bill Gates and Paul Allen formed a partnership that led to a little company called Microsoft. You are probably using some of their products as you read this article. Their company has become one of the largest in the world. These days, it seems their partnership is not what it once was but it was those early days of partnering with someone who made Bill Gates step outside of his comfort zone that helped the company grow. They complimented each other in different ways. They weren’t yes partners. They pushed and challenged each other and that’s what led to growth.
A wise man once said that if you’re not uncomfortable, you’re not growing. We have run from discomfort when the reality is that there are situations in which the discomfort comes from growing. When you can learn to embrace the opportunity to get uncomfortably from growth, you can take your business to whatever the next level is for you.
There are things you excel in. There are things you’re not so good at. The right business partner – and business partnerships – can help complete the areas you lack. We know that we’re the average of the people we associate with. Traditional logic tells you to associate and partner with people that make you comfortable.
While we want to associate with people whose personalities match, we want to seek out entrepreneurs that will push, inspire, motivate, and challenge us in the ways we can’t do for ourselves.
You want a business partner that will call you out when you’re clearly making excuses. They will challenge traditional ways of thinking about growth strategies. They will inspire you through the actions they’re already taking in their life and business. They walk their talk and let their success doing all the talking for them publicly. They are sincerely invested in seeing you succeed without expecting anything in return. They have love for you. They will stay with you through the good times and especially the hard times.
Don’t pick YES entrepreneurs or add them to your circle. Pick entrepreneurs that make you uncomfortable in a way that leads to growth in life and business. You only get one life to live. You have a goal and dream for your business. The right partners or partners can help you get there in a way that helps you scale.
This article was originally posted here on Entrepreneur.com.
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