The right kind of partnership can open up new markets and business opportunities as well as bring onboard valuable skills and resources, the wrong one can be frustrating and expensive.
From co-founders, investors, collaborators or large corporates – here is advice on managing some of your most important business relationships.
1. Choose wisely
“The most important step is deciding exactly what skills and experience you need to best complement yours. Start with your own judgment, but don’t hesitate to ask for advice from a seasoned investor. Ideal partners here should not include your best friend or a family member.” – Martin Zwilling Founder and CEO of Startup Professionals, a company that provides products and services to startup founders and small business owners, in a Business Insider article.
When you know that someone has got your back at all times, no matter what, it makes it easier for you to grow and try new things knowing you have their support whether you succeed or fail
2. They should care about the success of the business as much as you
“You want a partner who is as passionate about the business as you are, so seek out individuals who share your commitment and your drive. Look for someone who is involved with their craft outside of regular business hours. If you are looking for a good developer, attend local meetups within the coding community. [This matters] because if they are spending their own free time to attend these meetups, they are passionate about what they do, and it will reflect in their work.” – Shannon Conheady, CEO and co-founder of RepairQuote, is quoted in a BPlans article.
3. And share a common vision with you
“If you’re surrounding yourself with different energies that [are] not on the same wavelength as you, if they are not praying for you, inspiring you, supporting you or showing you a better way, remove them immediately. Take your time and really look at who you’re surrounding yourself with – are they like-minded, are they disciplined, are they pushing you forward.” – Sean Combs, record producer, investor and entrepreneur. Read more here
4. … and a common ‘Why’
”You must have a common ‘Why’. If you know why you are in business and if this is shared among partners then you will always be working from the same foundation with a heightened level of commitment to that vision and goal. Because of the close nature of the friendship, we are even more driven to ensure the survival of the business, we have each other’s best interest at heart and don’t ever want to let each other down.- Sandhya Singh and Raksha Mahabeer, co-founders of SummerTime, a creative design studio.
5. Partnerships have their perks
“When you know that someone has got your back at all times, no matter what, it makes it easier for you to grow and try new things knowing you have their support whether you succeed or fail. We have an unfailing love and support for each other. Going into business as friends also makes work feel like play. We work super hard to get everything going, but only when we get home do we realise how much work we have put into a specific project because the atmosphere we work in is friendly.” – Stephina Zwane and Salamina Mosese,co-founders of Sorele Media and Aza TV.
In the event you and your partner do not agree, it is important to decide on how the matter will be dealt with beforehand
6. But even good partnerships still require work
People management becomes so important later on because business is all about people, Romeo Kumalo, a venture capitalist, says. People do business with people they like and trust, so integrity is everything, he adds.
“Out of everything I’ve done, it really comes down to keeping your word. It’s so important that people trust you and [that] you’re a man of your word. In the end, that’s all it comes down to,” he says. Read more here
7. Agree on how you will manage disagreements
“In the event you and your partner do not agree, it is important to decide on how the matter will be dealt with beforehand. Does one person hold the final say, or is it by vote (if there is more than two partners)? It is better to avoid situations where your business is unable to move forward because partners can’t agree.” –
8. A partnership doesn’t always mean 50/50
“The mistake I see many business partners make is the old 50/50. In reality, it doesn’t usually play out that way, and things fall apart. Instead, start out a 10/10 split, with the remaining 80 staying in the company. Then, every quarter, based upon performance metrics that you choose (such as sales, hours worked, goals achieved, etc.), split up another 10 percent of the company. Within two years, all the equity will be distributed, and it will be a fair division. No one can fake performance for two solid years—and, if they can, they can fake it for the rest of the company’s existence.” – Mike Michalowicz, author, Profit First, advises in an American Express blog post.
Go on as many dates with potential investors as is necessary for you to be comfortable working with an investor team
9. Think of VCs as your partners too
“I always use the analogy of dating. Go on as many dates with potential investors as is necessary for you to be comfortable working with an investor team. They should be patient and supportive and commit to providing you with access to their network of contacts for business development purposes. They should understand your market and business model.” – Llew Claasen is the Managing Partner at Newtown Partners. Read more here
10. And treat them as such
“Set up a recurring lunch meeting with your investors – at least every 3 months for inactive investors and at least monthly for active investors. Communicate frequently about what is happening in your business. Don’t expect investors to make your business a success – get out there and hustle!” Llew Claasen is the Managing Partner at Newtown Partners. Read more here
11. Partnering with large corporates requires patience
“In general, the bigger the partner, the longer everything takes. We like to provide really good service to our customers and we have found that large operators because of their size take a long time. But the way we see it is once the ship is going in the right direction, it’s going to sail forever.” – Raphael Grojnowski, co-founder of Mama Money, a mobile money transfer service catering to Africa’s largely unbanked market and migrant population.