Five crucial factors to choosing the right business partner
Sometimes a smart solo operator needs the added value and expertise of another person to get a project done.
Choosing the right one can be as tricky as choosing a romantic partner and can lead to a similar kind of loss in terms of money and hurt feelings if it doesn’t work out.
So, based on some terrifically beneficial and some sadly sobering experiences of my own, I offer these five factors that might be useful to consider when choosing someone to work with, either on a short-term contract or a longer partnership.
1. What does your body say?
Although this may not sound scientific, research has shown that the impulses from the brain that alert us to be cautious actually have matching receptors in the lining of the intestine – hence the expression of having a gut feeling about something. If you experience a sense of unease, listen to it.
2. Ethical outlook
A shared view of the world and your place in it are integral to a positive working relationship. Unlike the situation in a traditional workplace setting, you as the decision maker can choose to spend time with people who share your values. It may seem like a side issue to the job in hand, but believe me, it can become a flashing red danger signal in an instant.
Another distinction is the alignment of intention. Like the wheels on a car, you both need to be finely balanced and heading in the same direction or there will be uneven wear and tear. Ask yourself, is there a shared view of the value of the work? Of the way it is to be delivered? Of the outcomes and the standards? Has this been made explicit?
4. Approaches to money in and out
Finances are the place where the rubber hits the road and friction over other problems can emerge. Ensure that exact percentages, profit division and loss-sharing are spelt out in as much detail as possible.
5. Heads of Agreement
Most of these points will emerge if you get a Heads of Agreement (HOA) in writing before you start. Especially if you are working with a friend, a written version of what you both understand to be the case is vital. This doesn’t have to necessarily be a legal document and can be simple in format as long as all the key information is clearly stated.
It once took five months of to and fro between a colleague and me and still the HOA was not signed. Referring to my own sage advice in this article, I now wonder why it took so long for me to realise that we had a totally different alignment, ethics and work method and cut my losses.