Entering into a business partnership is not a decision one makes lightly. You’re placing a lot of trust in your potential partner and there are certain things that need to be established before any kind of deal can proceed. Ensuring the venture will be both secure and mutually beneficial is crucial. But that’s just the tip of the iceberg. Here are five things you should be keeping in the back of your mind when entering a business partnership.
1. Do your homework
You should be thoroughly vetting any potential venture partner. The fastest way to do this is to work with a company like GlobalX Legal Solutions who can provide you with a wide array of company and business; land and property; and individual information – all on top of their specialist legal software. You should be looking at things like their credit rating, verifying their ABN information, or even delving into their APRA and Personal Properties and Securities Register information. All this research can give you an excellent idea of what your potential partner is about and what you can expect from them.
2. Are you up to scratch yourself?
Remember that whatever homework you do on your potential partner, they will be gathering the same information on you. How are your records looking? Is everything up to date? How’s your credit? Make sure all your information is as up to date as possible and alert any potential partners to anything that may raise any red flags for them ahead of time. There should be no surprises waiting for them in your information.
3. Asking for references
An excellent way to size up a potential partner is to interview anyone who has worked for or with them previously. This is because past behaviour is a powerful indicator of how an individual conducts themselves in business, and how they treat superiors and subordinates alike.
4. Consider any foreseeable obstacles
You need to be sure that your values and goals are a match with that of any potential business partner. New mergers and large scale changes are fun and exciting but that can lead to clouded judgement. You should be prepared to have a very real, grounded conversation about how you can both ensure future success and that means sailing into some potentially uncomfortable conversational waters. If you can’t do that, you might need to reconsider the partnership.
5. Are your own personal workstyles similar?
A great way to feel out how a potential partner operates is to work with them for a week. It will let you into their headspace a bit, show you how they make decisions and how they run their day-to-day operation. You’ll also be able to ascertain whether you’ll be able to work comfortably with this person or group. Knowing for sure whether they’re going to make your day-to-day life easier or more difficult should be high on your list of considerations.
These are just a few things to keep in mind before agreeing to enter a business partnership. You have to make sure that the deal is as beneficial, on every level, for you as it is for any potential partner. What do you think is the most important consideration when going into business with a partner? Leave your thoughts in the comments below.