Top 3 Things to Consider Before Entering a Business Partnership

Women Business Partners

Entering into a business partnership is like entering a marriage, which normally starts out positively but could turn negatively during the course of the business, especially when the business comes under stress like cash flow issues, inability to deliver products etc. Before you enter a business partnership, here are top 3 considerations to think about carefully.

 

1. Does Every Team Member Have The Same Ambition and Drive?

While it is common for team members to come from various backgrounds, some may be more well off than others, some may have financial obligations etc. It is not a big issue if everyone shares the same ambition and drive. The ambition is what each individual wants to achieve and the drive is usually determined by how badly they want it.

When team members have different drive levels, very quickly the person with the highest drive and energy may end up doing a lot more in a shorter time frame and may even blame the others for not putting the same kind of effort she is putting.

Pairing somebody who is hungry and driven with a person who is very comfortable in life may not be a good match. Personally, I feel that it is very difficult for a team who have different drive levels to succeed. My experience in such a scenario has not been ideal. However, if that is indeed the case, it is very important to get the next one right.

 

2. Does Everybody Have Their Roles and Responsibilities Defined?

It is best if roles and responsibilities of each person is spelt out clearly right from the start. It is best to leave nothing vague and make sure all the bases are covered. Who will be in charge of what, how much time would they be committing to and how much will they be compensated for their efforts etc.

This is to make sure there are as little disagreements as possible later due to jobscope, pay, equity etc. While it is impossible to get everything right from the start, it is important at least in the beginning to keep talking as a team and airing opinions early on rather than keep certain unhappiness to oneself as it may build up and explode after some time.

 

3. Does The Founding Team Have All The Skillsets and Experience Required?

Identify what areas are critical to the business. In general there are a few areas which need to be covered for any business to succeed. They are Product Design, Product Development, Sales, Marketing as well as Operations.

It is almost impossible for a single person to cover all the areas. Therefore a business partnership should consist of team members who have complementary skillsets who can cover all the bases. There is no point in having a 100% marketing skillset team if the product cannot be designed properly. Or there is no point in building an awesome product or service if the team cannot sell.

Of course every business is different, in a tech startup, product design & development as well as marketing could be top priority, while for a consulting firm, sales could be the most important. Evaluate your business very carefully to make sure you got  these important roles staffed by business partners. Hiring employees for key positions rarely works out well.

What do you think is the most important consideration? Feel free to share your thoughts and experience.

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Written By

Jackie Yeo is the co-founder of Ladyboss. She is an internet marketing specialist who focuses on helping clients build and manage their online presence. Jackie is also a strong advocate of women's rights and is keen to promote entrepreneurship among women. Outside work, she's a self-professed foodie and an avid dancer.

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