Start a business with a partner

Business partner relationships are often compared to marriage - and not without reason. Entering into a business partnership is no small commitment. You're going to spend more time with them than anyone else while you set up and run the business. The fate of your idea lies half in their hands. Which means you need to be damn sure you're on the same wavelength.

Partnering really isn't for everyone. This guide will help you figure out if you want to partner and, if you do, how to start finding the right person for the job.

Pros

  • Balance your skill set. Choosing a partner who excels in the areas your weaker in makes your business stronger all round. This in turn makes investors and banks more comfortable.
  • Split costs and share risks.
  • Less lonely. Having a business means you have someone who understands what you're going through as well as someone to work with.
  • Sharing responsibility. Big decisions and big debts are a huge emotional strain. Having someone to talk things out with is a real relief.
  • Bigger network. A business partner brings with them their own set of contacts - and if you choose wisely, they'll have access to the people you need. Though this shouldn't necessarily be a priority for getting a partner, as an investor can probably open more doors.
  • Means one of you can take time off while the other holds the fort - often a rare luxury in the startup world.
  • Better ideas. Having someone to bounce ideas off, who has a different outlook to you, will push the creative thinking of the business further.
  • Sector knowledge. If you're moving into an industry you don't necessarily have much or any experience in, joining forces with someone who does can save a lot of hassle and hard work.
  • Expertise. Similarly, bringing in someone who has more experience in business than you can help you avoid the pitfalls many startups fall into.

Cons

  • Risk to your relationship if you knew the person previously. Be very aware of the delicacies of mixing business with pleasure.
  • Risk potentially to your bank account as well if things go pear-shaped and you haven't drawn up proper contracts. Plus, there's always the - admittedly small but still real - risk the person you choose to partner with will screw you over.
  • Risk to your business idea as you can't really know how things will turn out with a partner until you've committed to working with them. You're at least in part placing the fate of your business idea and ambition in their hands.
  • Falling out over big decisions. While differences of opinion are what often develop ideas to their optimum stage, it can also be very frustrating when you really believe your way is better and you have to either compromise or do things differently.
  • Less independence in many respects - precisely because of the reason mentioned in the previous point. If you're very headstrong and have a tendency to always believe in your won ideas without being particularly flexible about it, a partnership probably isn't the right way forward for you. However, in some ways a partner can also afford you more independence, if you're both sure of and stick to your roles - as you will have more time to explore the areas you're strongest in and so develop these further in your own direction.
  • Different amounts to invest can make things awkward.
  • Much more difficult if things start going wrong with the company as you're both jointly responsible for everything - it just makes things more tangled.
  • Conflict over being the leader. One party is prone to get at least a little jealous if the other is always the one receiving praise or heading up the business and out there networking. Working tirelessly behind the scenes while your partner is out there doing the glory tasks can feel incredibly thankless. Leadership issues can also be problematic if you already have an idea and a sense of how you want things to work - you have to be very careful not to come across as the other person's boss. If you want a partner, you have to be willing to treat them as an equal, not an employee.
  • Difficulty resolving conflict. It's nigh-on impossible to judge how you and a potential partner will fare in an argument together and how easily you both compromise until you're so far in to the business that a really hairy problem has come up.
  • Hard to find the right person. This is one of the greatest challenges facing business starters who don't have an obvious choice in mind. Look at the section below for starting points, and don't be defeated easily in your search. That said, it'll always be better to go ahead solo than start a business with someone you don't completely trust or who isn't really the right fit for what you're doing.

What to look for in a business partner

You'd be lucky to find someone who ticks all these boxes, but this is the ideal checklist for your partner:

  • Someone with skills and experience in the areas you're weakest in.
  • Experience in the sector or in the role you'd picture them having.
  • If you already know them, someone you feel you can easily resolve conflict with and work with - and that's very often not just your best mate. Try to keep things slightly more at arm's length.
  • A character that'll complement yours and so benefit the working relationship. You definitely don't want anyone with a short temper or who's prone to being domineering.
  • Same ambitions as you.
  • Same values.
  • Same work ethic as you and same idea of how much time you want to put into the business.
  • Ideally, roughly the same amount to invest in the business as you - or, more to invest if you need a financial boost - just make sure you have contracts in place to protect both parties and keep things fair.
  • Someone with access to resources you don't have but want.
  • A business network that'll complement the business.
  • Trust. An absolute must. Is you don't trust them, don't partner with them. There's no question there.
  • Belief in the business idea - and determination to make it a success.
  • Natural chemistry.
  • Someone you naturally bounce ideas around with and get equally excited about new concepts with.
  • Ideally, someone with experience in a startup.

How to find a business partner

  • Assess your strengths and weaknesses and work out what you need from a partner. Use the list above to draw up a list of ideas attributes - something like a job spec. Work out which attributes are most important, as you're unlikely to find the partner of your dreams.
  • Consider people you know. This can be complicated by the issues mentioned above, but it can also give the opportunity to build a fantastic business with someone you already know, trust and like. Plus, you already know enough about them to not have to spend loads of time and meetings trying to figure them out.
  • Friends, family and business associates are, as always, another good source. You'd be amazed at how often there's a friend of a friend who's just the partner. Supplier or expert you need. You just need to start asking around everyone you know.
  • Get networking. The best place to meet a potential business partner is face-to-face - then you instantly know whether there's chemistry there and you could work together. Go to industry events aimed at the people whose skill set you want, or for relevant industries.
  • Business partner brokerages aim to match business partners. While you will have to pay a fee, they can produce the goods where other options aren't working out. Try the other avenues first, then give it a go.
  • There are also websites specifically aimed at matching business partners - see some in Resources below.
  • Leaders of business networks - which are worth joining if you're looking to find a partner anyway - will hopefully know enough members and be well connected enough to point you in the direction of at least a few leads.
  • Business coaches might also be able to help, for the same reason - they know a lot of people in business. It might help if you employ them to give you some training to sweeten the deal.
  • Head-hunters are another option, although you really will have to fork out for their services. Probably only worth it if you either have plentiful cash reserves, are desperate or are planning a fast-growth business that's going to require the very top talent.

Starting up together - get it right

  • Have plenty of meetings with anyone you're considering before making any rash decision - you need to know them well and trust them and their abilities implicitly before handing over half the business to them.
  • Try working on a couple of projects with them to see if things work out, or even do a couple of weeks trial - bid for work together and come up with ideas for developing the business.
  • Meet up with anyone you're seriously considering in a non-work atmosphere too - you want to make sure there's a social bond there too.
  • When you're nearing crunch time, jointly write out job descriptions for how you see yourselves operating within the business. It's very important to have your responsibilities clearly defined to avoid conflict further down the line.
  • You should both also talk in-depth about where you see the company going and your hopes and goals for it, over the next few months, year and future years - even exit plans. This makes sure you're both on the same page about the future.
  • If you've decided you're going to go into business with someone, get a contract drawn up as soon as possible, and certainly before either of you put any money down. Though it may seem there's no need for this now, it will help avoid conflict and problems further down the line.
  • Hire a solicitor who specialises in company formation and startups. They'll be able to foresee issues you may overlook.
  • Decide which type of business is going to suit you best.
  • Read more in our guides on company formation.
  • Your solicitor will also be able to help with this.
  • Going forward, make sure you stick to your assigned roles, and try to be diplomatic and compromise when necessary.

Resources