6 Questions To Ask Before Going For A Business Partnership

Many people want to go into business but very often they limited in one thing or the other. Sometimes they are limited in knowledge, other times they lack the needed skills and for most times, it is about the financial resources. And so they consider getting into partnership. 

In most cases initially, the partnership is exciting: more heads on the thinking table, more money and resources on board and more passion instilled into the business. All these are supposed to birth the desired success, but I tell you, this is not always the case. In fact, in most cases, it ends up a fiasco and most often people are hurt. It fails and no one likes to remember what happened. In cases where one person goes happily, it is hardly the initiator of the partnership.

Business partnerships are like contract marriages. You sign in for a few years with the hope that each person’s expectations will be met, and the business goal be achieved. If things get on fine, you decide to renew the contract. If not, you part ways in disappointment. So what I tell people is that business partnership is a wonderful way to do business but the success lies in partnering for the right reasons with the right person. 

I have seen people do extraordinarily wonderful by putting together their skills, ideas and resources and working towards a common goal. When there is a perfect jell between those involved in the partnership, the outcome is usually great. But, the cons are usually more than the pros, as I share with you in my piece titled "The Pros and Cons of Business Partnerships". 

Going into business with another person is not a decision you will want to make in a hurry. When partnerships begin, hopes are raised, expectations are high, disappointments are far from the scene, but in the long run as many things unfold, it doesn’t turn out as expected. 

Notwithstanding the high rate of failure of many business partnership contracts, business partnerships when well thought of and planned, are by far more rewarding than going solo. Remember the African proverb that says, “If you want to go fast, go alone; but if you want to go far, go with others”.

So in this piece, I want to present to you seven crucial questions you need to get clear answers on, if you will have an exciting and rewarding business partnership agreement. My hope is that at the end of it, you will be making a well informed decision that will change the phase of your business.
 

1.    Do I Really Need A Business Partner?  

Very often people get into business partnerships emotionally. They just feel they need someone, even if they don’t know why they need them. Ask many people what they really want to get out of a business partnership and they will fugit with an answer. It is often an emotional than a thoughtful decision. 

Sometimes, we get into partnership for reasons that could be handled by hiring someone to work for us or contracting the services of an expert. 

Getting into a partnership in order to bring in more money into the business is not enough reason for a partnership. There are alternative ways of raising money for your business that will spare you the heart-ache that comes with business partnership crises.
 
When you have a clear business goal and plan, you may realize that there are certain qualities, skills, levels of competence and experience that you lack, which are very inevitable for the success of your business. You may also see a clear need for an additional hand that brings to the table, more ideas, more steam, more commitment and connections. This will be a strong reason for a business partnership and anything short of this will not be enough. Getting this clear will go a long way to guide you in deciding on who to partner with.
 
So, do a SWOT (Strength, Weaknesses, Opportunities and Threats) analysis of your business and see those areas of weaknesses that need to be strengthened. See if you can strengthen them by getting an additional employee or contracting an expert. If not, then you could consider getting into a partnership with someone who has what you need. 

However, make sure your analysis of the business is very logical and not emotional. Emotions have the power to bring your business to ruins. Share with an expert, your reason for wanting a partnership and let them validate the need.

One other dimension to this question is to ask yourself; "Am I the partner type?" Some people prefer to do their things alone and take the full credits for the success and full blame for the failures. They won't easily accommodate another person sharing the decision-making power of the business with them. They won't easily tolerate another person's weaknesses, mistakes and failures. If you are such a person, you will not easily work with a partner.

2.    What Kind Of Person Do I Need For A Partner?

As you answer the first question on your need for business partnership, you will be getting a clearer picture of the kind of person you need to look out for. The tendency very often is to look out for people who are like you. We naturally gravitate towards people whose philosophy and approach to things match ours. This is a temptation you will need to overcome. It is needless to get into a partnership with someone who brings the same thing you bring, to the table.
 
If your need for partnership is validated by the fact that you see areas of weaknesses in your business that need to be strengthened, then you will be looking for someone who brings to the business, just the things you don’t have. 

Before you begin searching for a business partner, you must have clearly outlined the things you need from such a person in terms of personality, skills, competencies, business experience, etc. These should stem from the analysis you have done on the business. Some persons are introverts and will be looking for and extrovert personality. Some have skills in management and may just be looking for someone with great commercial skills and a wonderful experience in negotiating deals.
 
So, go for someone who possesses qualities that compliment yours but whose perspective of the business is similar to yours. In all, get someone who pairs up with you to produce a strong winning team. Don’t go for friends and relations except you are fully convinced that the business relationship shall not be treated with sentiments. John D. Rockefeller says "A friendship founded on business is a better deal than a business founded on friendship"
 

3.    What Are My Expectations From The Partnership?

This question is one that will enable you set the terms for the partnership. After diagnosing your need for partnership and defining what you need from a partner, you will be able to go ahead and state all the things you need from such a partner, in terms of contribution. 

It could be in the light of how much money your partner will need to bring in, how much time he will need to put in, what functions you will be expecting him perform, what level of commitment you will be expecting from him, what area of the business your partner will need to transform, what percentage of the profit you will be expecting him to generate, and so on. 

These are things you need to be clear on even before stepping out in search of a partner, and not when you have found one already. Just be clear on this, and you will be talking about the terms of the partnership.
 
Answering this question well will further authenticate your need for a partnership. If you can’t say what you will be expecting from a partner, you are not yet very ready for a partnership. One big thing you should expect from the partnership is professionalism. You both will need to be very professional so you should look for a professional in business.
 

4.    What Will Each One Benefit From The Partnership?

It is important that you define what the partner’s benefit will be when the partnership eventually succeeds. This will be important at the time of signing the partnership agreement because no one will agree to sign a partnership agreement without having a clear understanding of how he will benefit from the partnership. 

Here, you will more likely be thinking about the partner’s share of the profit monthly or yearly. This should be in terms of percentage so that you both have more to gain when all goes well and loss if all goes sour. Whatever you think should be the benefit of your partner, will need to be agreed by him before the signing of the partnership deal.
 

5.    For How Long Will The Partnership Last?

How long a partnership should last may not really be defined in terms of years but in terms of happenings. For example, it could be that the partnership will last until the business gets to so and so level, or until so and so has been accomplished, and so on.
 
Personally, I feel that any good partnership should not last too long. However, there should always be a clause that talks of renewal. This means after the defined period, if the two parties feel that it will be good to renew the partnership, they could do so.
 
It is also worth mentioning that during the period of partnership, there should be short periods after which the parties come together to review the partnership deal and see if each party’s expectations are being met by the other. If there are any needs for adjustments, they should be made.
 

6.    What Happens If The Partnership Fails?

Your final question is one that is very necessary, though many persons like to undermine its importance. Like I said before, the beginning of partnerships can be exciting sometimes but as time goes on, it is usually not too sweet to savor.
 
Before getting into a partnership, ask and answer this question. It will help you to be more careful about your choice of a partner. In answering this question you should be looking at how a failure in the partnership could affect the entire business. 

Some partnerships fail and the business still goes on normally but any partnership, whose failure will cost the existence of the business, is not worth entering into. Make sure the partnership terms don’t risk the business in any way.
 
Thus, you need to create room for resolution of conflicts as well as make clauses on how the partnership could be terminated, in a way that does not hamper the business’ existence. In any case, be assured that any failure in partnership will always affect a business, negatively.
 
I hope with these, you can make an informed decision before getting into a business partnership.

Please make your comments below.
 

by Kadzem Claude

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