The Do's and Don'ts of Finding a Business Partner
Securing a talented Business Partner for growth or as part of a gradual exit plan can be an excellent option to consider. We hear of success stories as well as unsuccessful outcomes and it always comes back to the same actions that lead to success.
Here are some tips on what to do and not do to make it a success.
Take time to find the right person who has complementary skills to you. This is an involved exercise as not only do you need capability but compatibility, capital and an entrepreneurial streak.
Look outside your business as well as inside and get the best person who meets your criteria.
Check to ascertain the person has the financial capacity and borrowing ability to complete any transaction otherwise you could find yourself back at step one again.
Conduct reference checks, a google search, a credit check and a police check.
Put a structure in place to ensure that any on-boarding works and there is a clear understanding of the plan.
Set up an Advisory Board. You may not have felt you needed it when you were the only owner, but you most certainly will need it when you are not.
Just focus on a current employee because they know the business and are trusted. That’s a great start but can they steer the ship, and do they want to?
Do a deal on a handshake and bypass a structured plan and written agreement.
Look for someone just like you as more often than not you will need to introduce complementary skills to grow the business.
Go down this path without taking expert advice and have someone guide you through the process.
About the Author:
Mike Warmington is a Director of Platform 1 NZ Ltd who specialises in using executive search techniques to find people with capability and equity for SME business owners wanting to transition.