Finding the Right Business Partners
One of the major challenges facing entrepreneurs and business
leaders is finding the right business partners. Great care
should be exercised when selecting associates because the right
choice can bridge gaps and assist in the execution of your
business plan. The wrong choice can harm the reputation and
earnings of your company. One should consider the following when
forming strategic alliances:
Find Believers in Your Mission
No one will champion
your cause like a true believer in your vision, products, and
services. Align yourself with those who comprehend the magnitude
of what you are doing and will offer wholehearted support to
your endeavors. Those who align themselves with you solely for
monetary gain will often carry a short-term perspective that
will conflict with your long-term business strategy.
Active Partner vs. Passive Partner
Another
consideration is: Are you looking for an active or passive
interest holder in your business? Do you seek someone who will
be involved in the day-to-day management of the company? Many
entrepreneurs opt for passive partners to avoid having them
encroach on the management of the business. If you elect active
partners, it is important that they share the same vision,
objectives, and ethics as your associates.
Smart Money vs. Silent Money
When pursuing financial
partnerships, you have several options. You can choose investors
that will solely provide financing, or you can partner with
funding sources that will also offer guidance and help in
strategic planning. Silent money could be the right choice if
you have a seasoned management team and desire total creative
control. However, if in both cases you will surrender the same
amount of equity, it makes more sense to partner with investors
who are well connected and may also offer advisory services.
Complementary Skill Set
Your ideal operations
partner will have a complementary skill set. They will
strengthen your areas of weakness and allow you to compete
effectively. Their affiliation will most importantly shorten, or
eliminate altogether, the development time necessary in
particular areas. Your resources will not have to be spent
acquiring expertise in areas where your partner is already adept.
Alliances
Your ideal partner should also be in a
position to help you form strategic partnerships. This
person/organization ought to be able to help you align yourself
with people who can assist in growing your business. Strategic
partnerships can also bring about needed political affiliations.
Growth and Exit Strategy
A major point of
contention for many partners is the company's growth and exit
strategy. Some parties may be content as the owners of a small
business, while others seek to franchise or even go public. All
parties should be in agreement on how they plan to access the
equity of the company, rather it be by salary and dividends, or
a substantial liquidity event.
The right partner can ease the road and multiply the prof