Business ownership can be challenging, so sometimes it makes sense to have business partners. Let’s explore some questions that all business owners should ask potential partners.
What Are Business Partnerships
A business partnership is a formal and legal arrangement between two or more people who will be involved in a business and share its profits. There are several types of business partnerships: general partnerships, limited partnerships, and limited liability partnerships, each with its own conditions.
Do You Need Business Partners
Before starting a serious search for business partners, it is important to consider whether you really need (or want) a business partner. There are pros and cons to having business partners.
The Pros:
- Business partners can add valuable knowledge and expertise as well as provide complementary skills.
- They can add new perspectives and insights and help you overcome blind spots.
- They can provide an infusion of critical cash, attract investors, or help raise capital for your business.
- They can help secure more business opportunities, perhaps with important personal connections.
- They can help you achieve better work/life balance by sharing a leadership workload.
The cons:
- Business partners share liabilities, so you share any backlash from the mistakes of a partner.
- You may lose some autonomy.
- There may be some emotional conflicts.
- There may be some future selling complications.
What Questions Should You Ask Potential Business Partners
Ask these questions of potential business partners to assure yourself of a good fit:
- What is his/her expectation of the time and skills required?
- What is their level of experience? Understand their skills and talents.
- Can the partner fully embrace your vision for the business? Will the partner’s commitment to the business be as strong as yours?
- What is the partner’s financial condition? You don’t want any major debts or red flags to cloud your relationship.
- What is the partner’s reputation?
- Is there anything in their personal life that would be problematic for you or the business?
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