Choosing the right business partner is one of the most important decisions you can make when starting or expanding your business. The below considerations will help you consider vital questions when choosing a business partner.
Finances
Let's deal with the elephant in the room first: finances. You must determine what type of financial contribution you're looking for from your business partner. The need for a large financial contribution may eliminate many of your choices immediately regardless of whether the person you have in mind is a good fit or not. Carefully thinking through your finances is crucial to the success of any business. Additionally, it will help you determine how many partners you should take on. If you need $50,000, and are unable to find a good partner who is will to contribute that amount, you can consider taking on 2 or 3 partners to fill that gap. Do you require a one-time contribution, or will you have periodic funding requirements? If so, what will they be, and how often. It's also important that your prospective business partner is aware of these funding requirements and is comfortable with them as well. If they are not, you should consider alternatives now.
If your needs are more modest however, you can put a heavier emphasis on other criteria in evaluating the best business partner for you.
Values
What do you value? Stop and ask yourself why you're embarking on this new venture. What is it that you're hoping to accomplish? Often, early-stage entrepreneurs neglect this consideration. What you value and what you're hoping to accomplish are critical questions to think through.
When selecting a business partner you should contemplate, and discuss whether your prospective business partner shares your values, and is hoping to accomplish the same thing as you. If your values are markedly different this may lead to clashes in the future when important decisions come up. Furthermore, it may frustrate the cohesiveness of your partnership.
For instance, if you place a high value on environmentally sustainable methods and products first and foremost your decisions will be influenced by that view. If you take on a business partner whose motives is profitability without regard to the environment you're bound to clash. Sometimes your values and those of a prospective business partner are irreconcilable; however, depending on the strength and prioritization of those values having a discussion upfront may help you smooth over disagreements in the future.
Expectations
There are perhaps few more important discussions one can have at the outset of a business partnership than expectations. What are your expectations of your business partner? What are their expectations of you? Most importantly, have you each communicated those expectations clearly to each other?
Essential to setting expectations is a prudent review of the following topics: time, level of commitment, nature of tasks,and finances.
How much time do you plan to put into your new venture? How much time do you expect your business partner to put in? This is a key discussion to have at the outset. If you fail to cover this topic your business partner you may find yourself satisfied with the enthusiasm your prospective partner displays, but sourly disappointed with the amount of time they're contributing to your success. Does your business partner have other commitments that may interfere with his or her ability to meet the obligations they're agreeing to take on? For instance, are they attending school and working a full time job? Do they have a demanding job that keeps them at the office long hours?
Next on this list is commitment. Where does this rank on your prospective partner's list of priorities? Where should it rank for you to feel comfortable? Do you need a business partner who is willing to drop everything in the event that an emergency comes up, or are you comfortable working with someone who will treat your business as a secondary or tertiary priority?
What tasks do you expect your prospective partner to work on? Have you communicated this clearly, and gotten feedback? For some budding partnerships you may need a partner who is comfortable being flexible and taking on ad hoc tasks. If that is what you're looking for, you should make it known. In contrast, you may need someone to handle one particular area of your business, e.g., marketing, accounting, programming, etc. Those expectations should be communicated as well lest you end up with a business partner who is expecting to be involved in far more aspects of your venture than you're comfortable with.
Complementary Strengths
What do you lack? Seriously, what do you need to know more about in order to succeed? Do you find yourself reading books or articles on marketing in your spare time? Do you struggle to generate new ideas to build awareness of your product or service?
Do you find yourself interacting with prospective investors without much success? Are you unable to determine the best legal structure for your business?
You must consider your strengths, but also your weaknesses. One of the most significant things a business partner can bring to your business is a complementary skill set. You should spend your time focusing on the areas you excel in, and find a business partner or business partners to tend to the areas where you have deficits.
Get Comfortable
Discussing your finances, values, expectations and seeking a partner with complementary strengths is a great way to narrow the pool of candidates. Once you have done so, get comfortable with your prospective choices.
Don't be afraid to have a credit check or background check performed. You need to ensure that you have found somebody who will make it easier for your business to succeed. Taking on a business partner with a poor track record of meeting their financial obligations may bring more stress than relief. Either way, you should make your decisions with your eyes wide open.
Ask for references. There's nothing wrong with asking for references. It's a great way to get to know the work habits of the person you're considering working with. Find out what other people think of that person, their works habits. Have their experiences been positive, or negative?
Does your business involve trade secrets? Are you working on a novel process, product or service where sensitivity is important? If so, you should contemplate a non-disclosure agreement. Not every partnership works out; if it doesn't, have you taken measures to adequately protect yourself? If you haven't you should.
Put it on Paper
Last, but not least, put it on paper. Reducing your agreement to writing is of eminent importance. This enables you and your prospective business partner to agree on the terms of your partnership. What will your respective ownership interests be? How will disputes be settled? What decisions will you or your business partner be able to make without the other's consent (e.g., a nominal purchase). What will the process for future funding and withdrawal be?
Reducing your agreement to writing is a great way of formalizing your expectations, and addressing potential future conflicts upfront.
| 
