From my experience, business is easier when you have partners. Working with the right person (or people) can significantly accelerate your success. However, your new venture can sink just as quickly if you don’t vet potential partners correctly. So, I compiled a list of questions to ask before you go into business together…
4 Questions to Ask Potential Business Partners
According to the IRS, nearly 4.5 million businesses are managed by partners in the United States. Nonetheless, there is another statistic that isn’t so positive…
70% OF ALL THESE PARTNERSHIPS FAIL.
The Balance
That said, I still suggest you bring others in on your business idea. A great business vehicle with great people behind it is unstoppable.
When people say that running a business is like a marriage, they’re right. For that reason, it makes sense you should get to know potential associates before things get serious.
The following questions will help you determine whether this person can be a solid partner for you and your venture…
What are their Goals/Targets for the Company?
Everyone has a different definition of success which is fine…
UNLESS YOU’RE RUNNING A COMPANY TOGETHER.
Therefore, ask about potential business partners’ goals for the venture in terms of:
- Revenue/Sales Targets
- Product or Project Progress
At the same time, let this person know your expectations as well. And if your ideas match up, I suggest you assign dates that you want these targets to be met.
This puts you both on the same page from the get-go. But, you need to agree on more than just logistics…
Do They Have the Same Moral Standards as You?
For a business to run smoothly, the obvious move is to become partners with like-minded people.
MOREOVER, IT IS JUST AS IMPORTANT — IF NOT MORE IMPORTANT — THAT THEIR CODE OF CONDUCT MATCHES YOURS AS WELL AS THEIR HUSTLE.
This is not just because you want to “get along” with your business partners. Poor personal choices from either of you can negatively affect the brand you’re working to build.
I promise. No matter what they can offer, your reputation is not worth the risk.
Yet, if there are no ethical red flags, you should know what they can add to your upcoming enterprise…
What Can They Bring to the Table?
Ultimately, you need business partners who are more than just talk if you’re going to score big.
With that in mind, think of vetting possible candidates like an upgraded job interview.
Some good topics to dig into are:
- Their specialized skills
- Industry experience
- Their network
- And, capital
Something else to note — any reluctance for them to be transparent about any of those subjects is a red flag.
This is not a polite tea party. This is business and you need a partner who can be real with you. Don’t compromise on this point. It will cost you.
Why Do They Want to Be Business Partners (Other than Money)?
The next test question to run by potential business partners is…
WHY DO THEY WANT TO BE A PART OF THIS IN THE FIRST PLACE?
Everyone has to make a living doing something. But, getting a startup off the ground is hard work…
The reason one chooses that path is because they believe in what the product can do for others. Not just the payday.
That purpose is what’s going to push partners to burn the candle at both ends, to do whatever it takes.
Without your colleague sharing that drive, you might as well be on your own…
Scoring This Test for Potential Business Partners
In my opinion, receiving unsatisfactory responses to any of these would keep me from doing business with someone.
I take my business partnerships very seriously.
However, these conversations can also open the floor to discussion and compromise. That choice is entirely up to you.
Just know who people really are before you become business partners. After all, you are committing to something (hopefully) very long-term.
Be Great,
Grant Cardone
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