If you’re setting up your company or are in a growth phase and looking for a new boost for your business, it may be time to look for a partner. But how do you choose the right person and what are the pitfalls? myLIFE offers a few tips.
Why take a business partner?
As a manager, there are many reasons to look for a partner: to expand your company’s skill set, gain access to new funds for future projects, get help with the day-to-day running of your business or take advantage of your partner’s network and/or reputation.
Whatever the motivation, finding the right partner is a decisive milestone in the success of your business. Your choice may help your company flourish but could also endanger its existence. So it goes without saying, that the choice of partner is not one to be taken lightly.
|Are you really ready for a partner?
Before you embark on the search for a partner, you must be sure that you are ready for power sharing! Although working in partnership has its advantages, there are also some drawbacks to take into account. If it is to work, cooperation must not be forced or undertaken for the wrong reasons.
Ask yourself if you are honestly ready to take account of another person’s opinion when taking major decisions for your company. Are you willing to make concessions? Share responsibilities? Divide the spoils? Or even account for the choices and maybe mistakes you have made?
If you answered yes to these questions, then you are ready for a partner. Otherwise or if you still have some doubts, take some time to mull over this idea or consider other solutions such as hiring an employee or finding other sources of funding for your company, etc.
Four principles when choosing a partner
As the saying goes, it’s better to be alone than in bad company. But how can you know in advance whether the partner you are considering is the right one? Here are a few things to consider to help you recognise the perfect candidate and avoid conflictual situations.
Make sure that your potential partner shares the same goals and vision of the company as you do.
1. Share the same goals and have a common vision
Make sure that your potential partner shares the same goals and vision of the company as you do. And make no mistake, “wanting to be profitable” does not constitute a vision – it’s a goal that is necessary to achieve the vision. So ask your potential partner about their views on the company’s future, the investments they envisage, and the short, medium and long-term growth strategy they would follow. You must be motivated by the same goals. It would be annoying to discover a few months down the line that your partner’s real goal is to sell the company as quickly as possible whilst your aim is for it to flourish over the long term.
→ Take the time to discuss all of these key points and try to find a compromise on any potential disagreements. If you cannot find common ground, it would make more sense not to proceed – you shouldn’t imagine that everything will just fall into place over time.
2. Choose complementary skill sets
In an ideal world, your partner’s profile should be complementary to your own. Don’t look for your clone, think of partnership as the opportunity to expand the range of skills available to your company! For example, if you have a technical or creative bias, look for a partner with some commercial know how or management skills.
Of course, you may have some similar skills; if this is the case, make sure you split the roles in a balanced way and define each person’s responsibilities. Who will look after production management, marketing, the finances? Who will be in charge of communications and administration? It is important to clearly define each person’s responsibilities in order to avoid stepping on each other’s toes and to boost the performance of your company.
→ Draw up a detailed inventory of your own skills, which will help you identify what you are missing for your company. In the future, you will be able to allocate tasks within the company more efficiently based on your partner’s strong points and your own.
Your partner must have an entrepreneurial approach (…) and be aware of the commitment required to hold this position.
3. Choose someone with an entrepreneurial approach
Going into partnership with a friend or family member may seem reassuring, but don’t forget that, first and foremost, this should be a professional relationship. Your partner must have an entrepreneurial approach. They must be reliable, capable of participating in strategic decisions for the company, and able to cope with unforeseen circumstances. Most of all, they must be aware of the commitment required to hold this position and ready to assume the risks. You are an entrepreneur yourself and understand better than anyone what is at stake here. You must be unequivocal on this point!
Make sure that your future partner is ready to make sacrifices (with their time, working rhythm and workload etc.) and is in a position to devote the time and energy required to commit themselves to the project. They mustn’t bail out at the slightest difficulty or decide to give it all up at the drop of a hat to go travelling the world!
→ Find out about their past professional experience and resistance to stress. Have they held this type of position previously? How did earlier partnerships pan out? Check out their financial and legal situation too, in order to avoid any nasty surprises. Lastly, find out about their other businesses and obligations, which could restrict their availability and commitment to your company.
4. Focus on a good professional understanding
You will be spending long hours working with your partner. So you need to check that the way you work and your characters are compatible. You will have to be able to work out solutions and reason things through together if your partnership is to be constructive and beneficial to the company. If your differences are too great, you run the risk of conflict or stalemate.
You and your partner will have to create a relationship of real trust. You will have to be at ease with each other and be aware that you will have to communicate regularly and be completely open with each other. Having the right skills isn’t enough, it is also key that you get on well and understand each other!
→ Going into partnership with someone you have already worked with and whose working methods you are familiar with may be a bonus for your company. If you haven’t worked together previously, you could always try out a test phase with your potential partner. This will let you check if you can work together properly!
Even if you have a great feeling about your future partner, it’s advisable to draw up a partnership agreement.
What precautions should you take when going into partnership?
Think that you’ve found the person you’ve been looking for? Congratulations! But even if you have a great feeling about your future partner, it’s advisable to draw up a partnership agreement. Get the help of a professional with this if necessary.
Useful info: we talk about a “pacte d’associés” (partnership agreement) for a société à responsabilité limitée (SARL – limited liability company) and a “pacte d’actionnaires” (shareholders’ agreement) for a société anonyme (SA – public limited company).
This is a confidential document, which exists alongside the company’s Articles of Association and details the rules governing the cooperation between partners. For example, it details the roles and responsibilities of each party, the operating structure, capital split, dispute resolution methods, conditions for selling shares and remuneration, etc.
The aim is to establish a healthy, transparent relationship between partners, which will protect each party in the event of disputes.
Choosing a partner is an important decision for the future of your company. Finding the right person may take time. Consider drawing on your professional network and personal contacts, or getting involved in events for entrepreneurs. You may attract the attention of your perfect partner! Good luck!