MODERN BUSINESS into discussing your entrepreneurial history , aspirations or any other great ideas that come to mind . If your candidate for partnership doesn ’ t appreciate your documented approach … find someone else more professionally focused .
Complimentary skillset The business plan will be believable if it mentions the need to build a team . The obvious but sometimes difficult component of the business plan is the documenting of the skills required to compliment the founding entrepreneur . It is those complimentary skills that will build a successful team . As well as complimentary skills the candidate partners will need the charm or political skills to work with a founding entrepreneur . This is not a skill every candidate will have . Working directly with entrepreneurs is a more demanding situation than working with a fellow employee in a medium to large organisation .
Openness There needs to be an openness about what you both expect . This is in part a sound business practice and a negotiation process to explore if the candidate is comfortable with your working style . A discussion about the commitment required emotionally and financially needs to be openly discussed . If and when an agreement is made , put it in writing . The more documented the understanding the better . Reference in all discussions should be directed back to the business plan . Remember if it ’ s not in writing … it did not happen !
Willingness to make it official The business partner agreement that will evolve over time needs to be attached to the business plan . This is a test of the relationship from the beginning . Few entrepreneurs are great at paperwork and even fewer are patient . It will take patience and a detailed approach . Remember that you are now investing in your future . The time spent on documenting the details is a bargain compared to the disruption of a misunderstanding later . If discussing money in detail is difficult , or not welcome … find someone else .
Agreeing to terms The most common reason for disputes in partnerships is not in the setting up , but the separating later . Marriage has family law and
a marriage license , but business partnerships often have no documentation about obligations and have never even considered a plan to allow the partnership to dissolve . This is the hot bed of disputes . The less effort up front the bigger the mess and , dare I say , hurt that will almost inevitably come when one of the partners feels that the honeymoon is over and the arrangement is not for them . The reasonable approach to an exit plan is for one partner to buy out the other who may wish to continue the company . Reasonable terms of valuation need to be documented . Usually a multiplier of profit or if no profit yet … an agreed formula .
Considering the points above should add a reality in to the challenge of choosing a business partner , though only you can make the final decision . As with all things entrepreneurial , it is high risk mixing an entrepreneurial business with human relationships . That is of course the difference between entrepreneurs and others . Entrepreneurs have to be brave enough to take the risk . Are you ?
Alan Manly is an entrepreneur with extensive experience owning and managing SMEs . He is also the author of When There Are Too Many Lawyers … There Is No Justice ($ 24.95 ), visit www . alanmanly . com . au
September 2016 ModernBusiness 49