Good VS Bad Business Partners

Table of Contents

1. Strategies to Find the Best Business Partner
2. Business Partner RED FLAGS
3. How to Dismiss Your Business Partner

Strategies to Find the Best Business Partner

Find someone you genuinely enjoy being around and trust

Your former and current colleagues could make ideal candidates for a business partnership. Because you have a work history, you already know what this person is like in a professional environment.

Attend industry events and make yourself seen

Industry events—conferences, lectures and trade shows—can present great opportunities for a potential business partnership because they bring together people with the same interests.

If you are a member of any online networking groups, this may be a great place find your business partner. If you do not currently belong to any groups, consider joining one; there is a networking group for virtually every occupation under the sun.

Find someone who shares your values

Successful partners generally agree on standards regarding what is desirable, undesirable, good, and bad. These values guide their actions, judgments, and choices. Rather than selecting a close friend with the same expertise as you, possibly look for friends or acquaintances that excel in areas you're less familiar with. Anyone in your social circle could be a candidate for a business partner.

Pick a business partner who is hungry to succeed

You want a partner who is as passionate about the business as you are, so seek out individuals who share your commitment and your drive.

Find someone who knows right and wrong in a give and take relationship

In successful partnerships each partner believes their rewards are equal or exceed their contributions. Casual acquaintances can maintain this sense of equity by keeping track of the benefits they exchange. However, in long-term and more committed relationships keeping track is unhealthy. Instead, each partner should have that sense of equity, knowing that some days s/he is giving and some days getting.

Find someone willing to engage in proactive conflict management

When people share a close connection, competing and avoiding are not effective conflict management strategies.

Find someone who wants to grow and will support your growth

Sometimes, we are not aware of the changes we're experiencing. And, sometimes change is viewed as a threat to the status quo. Successful partners embrace change and growth, knowing that this attitude benefits them both individually and as a team.

Business Partner RED FLADS

1. Poor communication
2. Unaligned mission and vision
3. Inconsistencies
4. Vague answers
5. Inflexibility
6. Lack of responsibility
7. Trash-talking others
8. Not respecting your time
9. Lack of enthusiasm
10. No focus on mutual success
11. A focus on grievances
12. Lack of clarity on deliverables
13. Rushing things
14. Increased focus on competitors
15. Lack of references

How to Dismiss Your Business Partner

If you've thought ahead, you'd have an exit agreement laid out at the beginning of the partnership. This is like a prenup for businesses and specifies how either party can get out of the partnership.

If you don't have an exit agreement, getting rid of a business partner is more difficult.

Buy Them Out

If you’re making good money, buying out your business partner can be the best route. Your partner may walk away with a big chunk of change, but in the long run, it will be best for the business. If you didn’t have a buyout plan in your initial partnership agreement, negotiations will be trickier and require a lawyer. And if your partner doesn’t want to sell, you can propose that they buy you out. Your only other option is to file a lawsuit, which is a long and expensive process with an uncertain outcome. If you really want to part ways with a bad business partner, you may have to be the one to walk away.

Come Up with a Royalty Agreement

Royalty deals are a great option for companies that have created a product. They’re sometimes written into the partnership agreement as an exit strategy for partners who provide the “creative genius” behind a product but aren’t interested in the day-to-day operations. If your partner helped to create a product, but now seems to have checked out or isn’t interested in running the business, this isn’t necessarily one of the bad qualities in a business partner – it just means their business identity is likely that of the artist, not manager or entrepreneur. In this situation, royalty deals are typically a win-win.

Dissolve the Partnership

Are you early in the start-up process? If so, how to get rid of your business partner could mean just walking away. If you haven’t started making money and don’t have a brand following or any products on the market, it’s easier to cut your losses now. This is also an option if you are in a very stressful position with a bad business partner and can’t find any other options. If your partner is going to run the business into the ground, consider getting out while you can. Starting a business involves some level of risk, so you can consider it a lesson learned and use it to make smarter decisions in your new venture.

Bad qualities in a business partner aren’t always obvious, but remember to listen to your gut – and use your head, not your heart. You can like your business partner as a person and even as a friend, but in the end, the goal of any business is to make money. If you need help figuring out your next steps, Tony Robbins’ Business Owner Evaluation can help. Your business’ future is in your hands.