How do we make this business partnership work? The partner we thought we had has turned out not to be a true partner. We feel like they went behind our backs and directly approached our customers and employees. This, after they’d agreed to keep hands-off.
Thoughts of the day: A business partnership works and develops over time. Relationships can strengthen, deepen if all have a willingness to grow and learn to work together. How much do you have in common with your partner candidates? What do you have in writing to document your agreements? Check backgrounds before starting work. If a deal sounds too good to be true, it probably is. Get everything in order up-front.
Set a clear foundation to make a business partnership work
Think about how you view the world, and how your partner candidate looks at things. Are you both on the same page with how to value big-picture items? For example, personnel, ethics, profitability, growth, exit strategy, quality? Do you have the same long-term goals in mind?
If you are not sure you know enough about how your partner looks at the world, spend time together. Get to know how they observe their world. Give them a chance to observe yours. It doesn’t have to be a perfect match, but there had better be more in common than not.
Now that you are in partnership, pull out any written agreements. Look for notes on how the deal was negotiated and what was promised. Don’t believe that trust means you don’t need to do your homework. Trust is earned, not granted. Know everything you can up front; you’ll be working together for a long time. Make sure it’s a relationship you can live with. Find out who your potential partner has worked with, and how productive those experiences were. No one is perfect, but it’s better if you both see each other as trustworthy to make this business partnership work.
Engagement at the highest level
Firstly, can you two work problems out, or might there be a blow-up? Secondly, what will happen if someone has concerns? Furthermore, if one of you is a control freak, it may be hard to give control to someone else. Be clear about who is in charge of what aspects. Work out those details before you jump in, or go any further.
Moreover, ask yourself, “Why would I get into this deal in the first place?” Maybe it sounds like a really great opportunity, or that this offer is something that can’t be missed. Don’t be naïve. Opportunity and lack of time to think could be what your potential partner intended to present to you. If it’s such a great deal, wait for both of you to do some due diligence on each other.
Spend time working out how to manage the relationship, and put agreements in place. Agree on key measures and scorecards that will be used to assess the performance of the business.
Meanwhile, what do you each want to get out of the relationship, and what are you each planning to put into the relationship? If you’re looking to leverage your partners’ business connections, make sure they’re the right connections for the business. After that, if your partner expects to sell some of their products to your customers, be sure your customers want what your partner has to sell.
Added-value of working together
Most partnerships fall apart over money. How much are each of you willing to invest, and what if that’s not enough? How does investment relate to control over ownership and decision-making? Come up with an exit plan, will one of you buy out the other, or sell to a third party? How long do you both intend to work in business partnership together? What happens if the numbers don’t play out as expected?
What will be expected from your employees? If someone you value has to be let go, can you live with that? Be certain that employees can deliver what’s required of them.
Spend time upfront getting through all of these questions. Make notes on how you both answer these questions. Get out of the office and spend time together, to make sure you can get along. Think of this adventure as a marriage — one that will have bumps along the way, but also one that can endure because the core is strong.
“Traction: Get a Grip on Your Business”, by Gino Wickman.
