Choosing the right business partner

Starting a new business is always a challenge. It requires countless long hours and late nights, giving up on another job or career as well as your social life which leads to leaving friends or even significant others behind.

Moreover, there are hundreds of decisions that are to be taken from which product or service you are going to launch, to which industry you are going to focus on, which customer will you be targeting, setting up a price, how you are going to raise money –crowdfunding, angel investors, venture capitalists, loans, personal financing, etcetera [1] – but probably one of the toughest decisions is who to go to business with.

 

At first glance, this might seem like the least of your worries because you might think that the idea itself is so wonderful that it will find its own way, however, you are not going to be an expert at every aspect of the business so you will need a partner eventually and it is important to think about it thoroughly and choose right as this factor alone might determine whether or not your company succeeds.

Knowledge about a product or an industry is not enough to go to business with someone. It is important to get to know him or her at a personal level because by continuously interacting with each other you would have a better understanding on each other’s reactions, values, goals, ideas, as well as finding out how each end can take appraisal or –more important- criticism, amongst other qualities. “After all, you are going to spend more time with your business partner than any other friend or family member, it is truly like marrying that person” as Montse Medina, Jetlore’s co-founder and COO mentioned [2].

However, this does not mean that you need to choose a partner just because you like spending time with each other, first you need to decide whether you actually need one or not. “Do not partner with someone just because you can’t afford to hire them. It is better to hire them as a consultant than to give away a part of your company” [3].

 

According to Medina, another important factor while searching for a business partner is to find someone that complements but does not overlap your skills [4].

Walt Disney Company is a great example of this, Walt Disney was the creative brother, the one with a dream and a powerful vision of what he wanted to achieve while Roy Disney had the business vision and made sure the company was financially stable. They both had completely different skills but they complemented each other and created the foundations for what is now a multinational mass media and entertainment conglomerate, the 8^th world’s most valuable brands in 2018 with sales that exceed $56B USD [5].

However, other companies might disagree with this statement. We have Google for example where both Larry Page and Sergey Brin are computer scientists, or Bill Hewlett and David Packard both engineers that co-founded Hewlett-Packard Company, William Procter and James Gamble industrialists that created Procter and Gamble, amongst many others [6].

 

The truth is that every successful business has a completely different story. Some stories include anecdotes of how they built an empire through starting a business with a friend or someone they barely knew and kept a strictly professional relationship, some might argue that having overlapping skills make the other’s job redundant, some others might say that even overlapping skills complemented each other by doing things faster and better, a few others decided to spend some time working together in smaller projects before committing to it, others decided not to waste time on that and started to get their hands dirty straight away. However, from my perspective, the one thing you nor your business partner can lack of is passion for the project. If both truly believe that the project is worthwhile fighting for, both will be deeply committed to seeing it succeed.

 

References:

[1] Sullivan M. (2017). 12 Different ways to fund your new business. Quickbooks. Retrieved July 11^th from: https://quickbooks.intuit.com/r/finding-funding/12-different-ways-to-fund-your-small-business/

[2] [4]. Medina M. (2018, July 6). Jetlore Conference. Stanford University. Leading Trends in IT.

[3]. Wasley P. (2016). 8 Critical Considerations for Choosing the Right Business Partner. Entrepreneur. Business Partnership: Retrieved July 8^th from: https://www.entrepreneur.com/article/273813

[5]. Forbes (2018). The World’s Largest Public Companies (2018 Ranking). Retrieved July 10^th from: https://www.forbes.com/companies/walt-disney/

[6]. El Comercio (2017). 5 empresas exitosas fundadas por duplas ganadoras. Zona Ejecutiva. Negocios. Retrieved July 11^th from: https://elcomercio.pe/especial/zona-ejecutiva/negocios/5-empresas-exitosas-fundadas-duplas-ganadoras-noticia-1990453