We build the right relationship with a business partner

All those who started their business with partners, faced the following questions, how to build the right partnerships, which partners to give preference to, as much as possible to protect themselves from possible conflicts with a partner in the future.

I would like to share experience in partnership and give recommendations. Below I give an interpretation of only my personal experience and do not pretend to be the absolute truth.

In this post, I will briefly describe the following questions:
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1. Which partnership option to choose, in terms of investment;
2. Major mistakes in creating a partnership;
3. Fatal partnership mistakes;
4. General rules.

1. Which partnership option to choose, in terms of investment

Choose a business partner, a process similar to choosing a wife / husband, taking into account the fact that as a rule you spend more time together with a partner (active time of day) than with a wife / husband (in case partners work together).

I will consider several partnership options that I have encountered in 8 years of business:

1. Partners who invest money, but do not participate in the company (“money”);
2. Partners who invest money and take part in the work of the company (“money + brains”);
3. Partners who invest intellectual resources ("brains").

Partners who invest money but do not participate in the work of the company.

Cooperation with such partners is justified when launching expensive projects, when large investments and financial support of the business are required, over a certain period. I do not consider this option, since there was no such experience, except for proposals to create such a business.

Do not be tempted by the option when the investment is relatively small and the prospects for increasing investment from this investor are zero (a couple of computers, furniture, a couple of months of rent). It is easy to find such an investor, but such a partner will only be a burden and will not bring anything into the business, except, perhaps, control, imposing their vision of solutions, usually far from the realities of your business, this partnership will definitely lead to conflict, especially if you are young and you have ambitions and vanity

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• easy business start
• easy to find a partner
• certain leeway
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• fifth wheel
• deferred conflict

Partners who invest money and take part in the work of the company

Such an investor can be interesting, because apart from investments, they can bring their knowledge and experience to the business. Such partners may not understand your business directly, but may have competence in other areas, marketing, finance, HR, and other knowledge that is useful to the business.

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• additional competencies of business participants
• synergistic effect
• money + advice
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• restriction of freedom of decision making by the managing partner

Partners who invest intellectual property (knowledge and time)

In this case, you yourself are an investor, attracting a person into the partnership who owns a certain competence, without which a new business is sometimes impossible, or without this specialist, the business will not be actively developed. It is known that the "digital" business (as well as most others), depends entirely on the people who are involved in this business.

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• synergistic effect
• strong motivation of the “intellectual” partner
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• business’s dependence on a partner owning “exceptional” competence in the business
• attitude of the “intellectual” partner to the business, as to hired work (does not feel that it is the owner)
• the main risks are borne by the partner who invested in the business,

! The main remark, a partner who invests his personal finances in a business, is to treat the business more responsibly (at times).

2. Major mistakes in creating a partnership

1. Lack of trust between partners;
2. Lack of salary from partners who work in the company;
3. The lack of a scenario in case of termination of the partnership;
4. The absence of a scenario in case of additional investments, if the business plan for sufficient cash flow is not executed;
5. The lack of a clear and understandable accounting system.

3. Fatal partnership errors

1. Cheating at the stage of creating a partnership
2. Partners have different goals.
3. Laziness
4. Nepotism

4. General rules

1. Do not start a partnership with friends, are meant with real friends, and not with friends or comrades (you can with them). This can be done if you are ready to lose a friend and get a lot of money, perhaps it will make you both happier, in the second half of the scale there will be friendship;
2. Do not do business with your husband, wife, close relative of a friend, girlfriend, this can be done if you really want to help this person or family and accept the deterioration of relations as your cross;
3. When creating a partnership, the proverb “It’s better with a clever to lose than with a bad one to find” appears more than ever. I think that this proverb was invented when it was long ago merchants or artisans;
4. Women are more responsible for business and partnership, I got the impression that they are more reliable;
5. Starting a partnership with a strong partner, a shark business that has connections and weight in society should be prepared that you can lose your business, the shark can eat you. In order for this to happen, you also need to quickly become a shark and not be a bit dirty, 2 sharks can effectively work in harmony. The “batana” and “shark” symbiosis is also possible, but as long as it is organized by a shark, it can last for decades, or maybe days;
6. Never fully rely on your partner, thinking that he will solve all your problems and problems, it is better to be surprised every time and thank fate when this happens;
7. Do not distribute thoughtlessly a share in a business; weigh it 10 times before transferring it to someone or selling it.

If this article is interesting, I will continue this topic and share my knowledge, observations and conclusions. Such as determining a share in a partnership, assessing one’s share, setting up a partnership, building long-term relationships with a partner, and how to avoid mortgaging a conflict.