Going into a business partnership? Seven attributes to consider first

Having been involved in both successful and unsuccessful business partnerships in the past, I have come to realise a few truths along the way that could be useful for anyone contemplating entering a partnership.

Thinking about the attributes before committing will allow for a degree of objectivity in a time when all parties are optimistic for the future. It is worth remembering that no one thinks of anything but success when forming business partnerships, yet many still do end up falling apart over time.

The attributes outlined here assume the obvious, that all parties contemplating a partnership have the basic qualifications and skills required to contribute functionally to the partnership. Instead I look at other, less obvious, attributes that drive how they act within the business, which I believe are the real determinants of success.

Attribute 1 – Ethics & Values
It is imperative that business partners share a relatively common world view, especially in terms of ethics and values. It is not necessary to look at issues in exactly the same way, as successful partnerships often result from partners looking at issues from different angles, be they strategic, operational, creative or financial. But personal philosophies affect everything, and cannot be separated from dealings with clients, staff and suppliers. If your business partner unveils themself at exactly the wrong moment to be close minded, bigoted or a philanderer, relations will become strained very quickly.

·         TIP: Engaging the prospective partner in a wide range of conversations beyond ‘business talk’ is often a good way to test your ethical compatibility. Throwing in some subtle hypothetical questions may allow light to be shone on some hidden parts of their personality that may ordinarily stay in the shadows.

Attribute 2 – Work Ethic
The idea of ‘working smart’ should be a core focus, valuing output as the key outcome, rather than many hours you spend at the office.

If your attitudes are different, with one partner focused on outcomes and the other focused on hours spent in the office, a feeling of resentment is likely to ensue.

An ex-partner of mine would spend half of every weekend in the office, needlessly going through our staff’s work, rearranging their files and checking emails, and then proceed to spend the working week complaining about how he was working on weekends.

Open dialogue about mutual expectations is important here. This is a discussion that needs to happen up front.

Believe me, being involved in a business partnership with a martyr is no fun at all.

·         TIP: Be open about your thoughts regarding working hours and work-life balance and reach a mutual understanding regarding expectations.

Attribute 3- Intelligence
When you grow a successful partnership, you grow it as partners.  However, if one of the partners is significantly more intelligent than the other, that partner tends to end up bearing more of the intellectual load for strategically growing the business. And once that starts to happen, the other partner may go into autopilot, relinquishing all responsibility for the success of the business. Very quickly the more intelligent partner will begin to solely feel responsibility for the success of the business and feel like they are dragging an anchor around.

·         TIP: Unless you want to be in business with a “silent” partner, avoid partnering with someone who cannot add to the intellectual capital of the business.

Attribute 4 – Knowledge Currency
In most business categories, things change at a rapid rate, especially in the age of social media expansion and rapid technological changes.  As keeping up-to-date is an important part of staying successful as a business, potential partners must keep themselves ahead of the game and not just rely on employing staff who understand new methods or technologies.

·         Tip: Making sure that there is mutual agreement amongst the partners that they will continue to professionally grow by attending conferences & seminars, reading trade press & books, and participating in social media. Relying on a decade old degree is no way to go nowadays.

Attribute 5 – Decision Making Ability
Rational, calm decision makers succeed. Emotional decision makers fail. Simple.

I have been in a business where I feared going on leave because of the decision making ability of a former partner. To give an example, if a client challenged our company on price, my approach would be to sit down discuss the issue and find a commercial solution that was mutually satisfactory. 

In the same scenario my business partner would drop the price on the spot without question, for fear of losing the work. He could not understand that this immediate price backdown sent a message to the client, quite incorrectly, that our original price was inflated.

Not surprisingly, the client would soon start wondering if we had been cheating them on price all along, destroying the trust built over years of hard work.

When this kind of thing happens once you can mark it down to experience, but when your business partner does the same thing again and again, you have to wonder about their decision making ability.

·         Tip: If one of the partners is an emotional or bad decision maker, either discuss it with them and agree to remove critical decision making ability from them or step away from the partnership.

Attribute 6 – Control
Related closely to decision making ability is control. This is especially important when a new partner is joining an existing business that has been operating as a solo operation. Often the established partner might be talking as if they are in a partnership, but acting in as if they are still in charge of a sole proprietorship. Although this lack of respect is often unintended, it still leads quickly to frustration on the part of the new partner.

·         Tip: Set some parameters around decision making upfront. And make sure they are written down as a reference point if required.

Attribute 7 – Listening
Listening is an underrated function in any business, be it with clients, suppliers or staff. At a primal level people want to have their views understood. This sounds completely fundamental, but it can bring a business seriously undone if a partner doesn’t have their ears switched on.

I once was in a business partnership with someone who loved to talk, but did not listen to anyone. It wasn’t that he was deaf, rather he was just too busy thinking about what he wanted to say next. As clients spoke his eyes would glaze slightly over, before he jumped back in, interrupting them with the next thing he wanted to say.

On more than a few occasions I told him pointedly that his ears “must be painted on”.  He never took offence though – he wasn’t listening.

·         Tip: Ensure that the potential partner is an active listener who is good at two-way personal communication.

It has often been said that a business partnership is a lot like a marriage. And just like any good marriage, a successful business partnership should be based on a range of core attributes such as those discussed above.

The learning of all this, in my opinion, is that how a partner acts within the business can end up being be far more important than what they functionally do in the business.

Using the attributes outlined above as a basis, potential partners can create stronger partnerships from the beginning or even save themselves a lot a time, stress and money by walking away from a bad partnership opportunity before committing to such an investment.

Simon Rowell is Founder of Australian branding agency Brand Intellect.