Picking a Business Partner – 5 Red Flags to Watch Out For
Launching a new business with a partner can be a great option. Working with someone with complementary skills and abilities will make the startup faster and easier on both of you…as long as you are both on the same page to start. Partnerships do not always work out, and sometimes they can end very badly. In nearly every failure, however, there are red flags that one partner ignored early on. Here are a few of those red flags to watch for if you are considering a startup business partner.
About everything, all the time. If nothing you say is ever right now, you can be sure to have the same problems once the business is up and running. One confrontation after another is no way to start a business. Along the same lines, if he tends to shoot down all of your ideas and suggestions, you will find yourself disenchanted with the whole situation very quickly.
He has no opinion.
Unless the partnership is set up that way, a partner with no opinion is just going to be difficult. The whole point of a partnership is to share the load, and a jellyfish partner isn’t going to hold up his end of the deal. Even if the startup idea is entirely yours, a good partner should be able to come up with alternative or additional ideas that build on your original concept.
All he talks about is the money.
If your potential partner is the numbers guy, you can sometimes let this slide…to a point. But if the focus is primarily on his own compensation, run for the hills. These wannabe entrepreneurs typically assume that a startup business is their own personal ATM and are likely to cause you significant problems down the road. Partners who are only really concerned about their immediate paycheck are usually too short-sighted to succeed in building their own company.
He has no follow-through.
Every startup meeting should end with a clear list of assignments for each partner to accomplish before the next meeting. If your potential partner can’t seem to get his job done during startup, it’s not likely to improve once the business is up and running. Be on alert for too many excuses and too little productivity.
He just can’t get along.
A huge part of launching a successful company is networking with suppliers, customers, and even other entrepreneurs. If your potential partner can’t even get along with the waiter at your local deli, he’s not likely to do much better with an important client. Relationships are critically important in today’s business climate, so do not risk your startup on someone who has superiority or personality issues.
Finding the right business partner can be tough. Look for someone you get along well with and respect. Look for signs that he respects you as well. Talk through all the details of what you are doing, including who will be responsible for what. Discuss the full range of what-if scenarios – what if we fail? What if we succeed? What if we need more capital? What if we want to bring another partner in? What if one of us wants out? If it is difficult to discuss the hard stuff before you start, it will be even harder when the problems come up.