business partnership – Getentrepreneurial.com: Resources for Small Business Entrepreneurs in 2024

Article Contributed by Michele DeKinder-Smith

When a female business owner is considering a business partnership, evaluating her prospective partner based on several criteria increases the likelihood that the match will yield positive results for both parties. While gut instinct and good chemistry may make the partnership friendly and enjoyable, those two components on their own do not necessarily create a recipe for business success. Rather, careful evaluation of specific business-related components of the prospective partner’s personality and experience can lead to entrepreneurial harmony – and business success.

Extensive research with women business owners about all aspects of
business ownership reveals the importance of due diligence when selecting a business partner. Further, research shows there are seven main characteristics to consider in prospective partners. This article discusses the details of two of those characteristics.

Characteristic 1: Suitability for Entrepreneurship

The question: “Is the prospective partner well-suited for being self-employed?”

Although a prospective partner may have great ideas, tons of money, or be a complete sales superstar, that doesn’t necessarily mean she is cut out to be a great businessperson. If both partners have been self-employed before, the question of suitability may be easy to answer. If one of the partners (or neither) has been self-employed, consider the financial risks of self-employment, the self-discipline required, family tension, and the challenges of working at home (if applicable), just to get started.

It is important to realize that even if a prospective partner seems like a perfect match, if he or she is not suited to the entrepreneurial lifestyle, then he or she may end up unhappy or dissatisfied, or even unknowingly causing business problems.

If a prospective partner is cut out for business ownership and/or has succeeded at running a business of his or her own already, then the partners must determine whether they are well-suited to work together. If they’re not sure, they should do themselves a favor and discuss the challenges of entrepreneurship as much as they discuss the possibilities.

Characteristic 2: Compatible Business Goals and Values

The question: “Are there any conflicts around the partners’ business goals and values that would prohibit or jeopardize their ability to successfully partner together?”

Different types of business owners strive for different balances in their work. For a partnership to work well, the prospective partners must determine, ahead of time, how well their goals for business and for work-life balance fit together – and if they are not similar, how the partners can work out the differences.

For example, if one partner sees business ownership as a way to spend more time with her family and the other expects to put in 60-hour work weeks, the two partners may not be compatible. If one partner wants to build a multi-million dollar empire and the other wants to run a small, home-based business, they may not be compatible.

Here are some examples of partnerships between two types of business owners – and their potential high points and conflicts:

• Jane Dough and Go Jane Go: Both are driven to succeed, but for different reasons, with Jane Dough looking for growth and profit while Go Jane Go strives for service and deep customer relationships. To avoid miscommunication, these two types should discuss how to be of service while also hitting profit goals. Also, it is important for Jane Dough and Go Jane Go to keep lines of communication open, because Go Jane Go may tend to shoulder more than her share of work.

• Accidental Jane and Merry Jane: This partnership has the potential to be strong, because both types want life balance and time freedom. One point to consider: finding the right mix of business to deliver sufficient income to make both partners happy.

• Accidental Jane and Tenacity Jane: This partnership may be tricky because Accidental Jane wants an ideal job while Tenacity Jane may seek business growth (although she lacks experience or important skills). To succeed, they must discuss expectations about time and effort, as well as how they will handle financial decisions. Tenacity Jane may also seek a mentor who can help her develop skills that Accidental Jane may care less about.

Women business owners should keep in mind that all partner pairings can work, given a commitment to open dialog and mutual understanding. The best exercise to determine whether your business goals are in harmony – whether they’re two different entrepreneurial types or two entrepreneurs of the same type – is to put together a business plan, or at least start sketching out the process. The business planning process has the potential to reveal significant differences in partners’ long-term goals and approach. Those differences do not necessarily mean the end of a business partnership before it even begins. Rather, a complementary approach, in which partners consider all points of view and arrive at solutions that draw on their mutual experiences, will strengthen all business decisions.

One more key consideration: essential and desirable values. From creativity to risk-taking, and religion to parenting styles, all values come into play when two people work closely together.

If business partners share core values, their relationship will likely be more harmonious and rewarding. It is important for partners to understand each other’s entrepreneurial type and values, to increase the possibility that the partnership will thrive.

When two prospective partners are compatible in terms of entrepreneurial style and experience, and in terms of core values, their partnership is more likely to produce excellent business results that meet both their needs and desires.

About the Author:

Michele DeKinder-Smith, is the founder and CEO of Linkage Research, Inc, a marketing research firm with Fortune 500 clients such as Starbucks, Frito Lay, Tropicana, Texas Instruments, Hoover Vacuums and Verizon Wireless. She parlayed this entrepreneurial knowledge and experience into founding Jane Out of the Box, a company that provides female entrepreneurs like YOU with powerful resources, such as educational blogs, teleclasses, newsletters, and books. Michele was recently named to the National Association of Women Business Owners national board of directors for a two-year term. Buy a copy of her latest book with coauthor Azriela Jaffe, “See Jane Collaborate,” which contains more in-depth information about this article’s topic, at www.seejanecollaborate.com.

Article Contributed by Michele DeKinder-Smith

When two business owners form a partnership, each one brings strengths, skills, and enthusiasm to the table. It’s important for the strengths and skills of one partner to complement those of the other so that the new partnership offers a broader range of skill sets. In some cases, one or both partners may have shaky credit history or even a criminal history – and those are guests many people wouldn’t want at their table. Therefore, when examining a prospective partner’s positives, it is important to check for negatives, as well.

Extensive research with women business owners about all aspects of business ownership reveals the importance of due diligence when selecting a business partner. Further, research shows there are seven main characteristics to consider in prospective partners. This article discusses the details of two of those characteristics.

Characteristic 1: Complementary Business Skills and Business Competence

The question: “What is each partner bringing to the partnership in terms of skills, knowledge, work experience and strengths?”

Most female entrepreneurs are not looking for clones of themselves in a partner; rather, they are looking for a partner whose skills and strengths fill in the gaps in their own. If this partnership is a new one, it’s important that each partner demonstrates competency through personal and professional references, as well as through a demonstration of her work and abilities.

To gather more information about a prospective partner’s competency, spend some time with him or her – whether it’s apprenticing, working together on a small joint project or talking with his or her employees and customers. Don’t just check out the surface; delve into their work as deeply as possible.

It is essential that a business owner checks out her prospective partner’s work in person before launching a partnership. Impressive brochures and great chemistry may be alluring, but they may not make up for what a prospective partner lacks in experience or skills. Most female business owners have heard that past behavior is the best predictor of future behavior – and that is true in business, as well. While past accomplishments are not one hundred percent accurate when forecasting the future, past records of achievement are excellent clues.

Criteria 2: Solid Credit History and No Trouble with the Law

The question: “Do prospective partners’ credit history and legal status live up to the way they present themselves as businesspeople?”

A female entrepreneur may have a prospective partner in mind, and may have great chemistry with her. The situation may look, “all systems go.” Would that status change if the entrepreneur learned that the prospective partner had bad credit history, was late or delinquent on child support or alimony payments?

Depending on how much money is at stake in a partnership, prospective partners may decide to perform credit and criminal checks – after all, any financial pressure the partners experience will directly affect their business motivations and behavior. That same idea carries over into the new partnership; for example, if the newly-created business began to struggle financially, how would the partners react? How have they reacted in the past when under pressure?

Because each partner will be placing her livelihood in the other partner’s hands, it is absolutely appropriate to ask for evidence that each partner can handle her own financial affairs. In longer-term and/or legal partnerships, one partner’s decision-making can significantly impact the other’s financial well-being.

According to the Fair Credit Reporting Act (the national law that governs the credit industry), joining with someone in a business partnership is considered a permissible reason to access his or her credit history information.

Begin with local credit bureaus, credit reporting agencies and the courthouse in the county where the prospective partner lives.

New partners often overlook or avoid these steps, viewing them as unnecessarily cautious steps that will slow down the process and introduce hostility into the relationship. However, these steps are critical, if not necessary, especially when the partners don’t know each other very well.

When creating a partnership, it is essential for both business owners to understand all of the facets each partner brings to the table – from skills and competency to credit and criminal history. Each of these items directly affects the outcome of a business partnership.

About the Author: