Providing Solutions

Red flags when choosing your business partner

On Behalf of | Jan 17, 2020 | Business Formation And Planning |

You want to start a business, but you don’t want to do it alone. You know you could benefit from a business partner. You’re looking for someone who has skills and talents that you lack.

Who you choose is incredibly important to the health and success of your business moving forward. You do not want to make any mistakes. With that in mind, here are some red flags to look for:

1. They have another motive.

You care about your company, your brand, your idea. But does your partner? Or do they have another motive? Maybe they have been thinking about starting a similar company on their own. They figure they can start one with you, learn the ropes, make mistakes, and then leave and start their own company when they know more. Their goal is focused on themselves, not on making your company a success.

2. They do not work as hard as you do.

Everyone must put in the same effort. If you show up at 6 every morning and put in 10- or 12-hour days while your partner shows up late, leaves early and spends a lot of their work hours browsing social media on their phone, it’s a massive red flag. It shows they don’t take this as seriously as you do. Plus, if you’re both making the same money, is that actually fair with such different effort levels?

3. They don’t know as much as you do.

This isn’t to say that you can’t work with someone who isn’t an expert in the field. Maybe they have skills you don’t — they’re good at customer relations and outreach, while you’re good at product development. The problem is when they simply don’t have expertise in any area and you end up teaching them as you go. It’s one thing to teach your employees. You do not want to feel like you have to teach your business partner.

4. You both don’t get along outside of work.

This is a tough one. You can have business success, even with someone you don’t like. However, are you going to be more successful with someone you do like, someone who gives you an energy and drive to succeed? If you dread going into work and seeing them, will that hold the company back? Some experts say you should never partner up with someone if you know you would not take a vacation with them.

Starting your company

Once you do find the right partner, you need to know how to set up a partnership agreement and start your company. It’s also important to know what protections and legal options you have if things do not work out as well as you hoped.