What partners do you need to successfully grow and build your business? You’re going to need suppliers, for a start. These are the people who provide the materials you need for creating your product or delivering your service. You’re also going to need vendors — from consultants and lawyers to software providers and office supply companies — to support your operation.
Other partners you will eventually need to bring in might not be as obvious. For instance, you’re going to need coaches and mentors to guide you and offer advice. If your company is like most, you will also want to eventually bring in investors to help finance growth. You’re also going to need employees to do more and more of the work as you grow, and you might even need to take on brand ambassadors and evangelists to help you build your brand.
Last, but not least, you’re going to need customers to drive the whole operation.
Each of these relationships are also key business partnerships. A great partnership benefits both parties, and helps them both achieve their goals. So how do you create a great partnership? Here are five simple tips to help you find and build sustainable and rewarding partnerships.
1. Align your interests
When it comes to creating a new partnership or agreement, I’m a big fan of aligning interests. It’s a natural process for building partnerships, allowing you to see the situation from the other party’s perspective. It’s much easier to make a partnership worth their while if you can build an agreement that benefits both of you.
Of course, you don’t want to forget about your own interests in the alignment process. This can be tricky for “people pleaser” personalities, for instance, who can sometimes enter into deals that benefit the other party far more than it benefits them. A good partnership benefits both parties in ways that make them both come out on top.
2. Consider the fallout of a failed partnership
Another thing to keep in mind is the possibility that a partnership might fail. If that happens, what will the results mean for your business? Will it simply be a headache, or will it topple your business completely? As you consider new partnerships, it’s worth imagining a worst-case scenario, and the variety of impacts the failed partnership could have.
The concept here isn’t to make every potential partnership a downer, or to “borrow trouble” (as we say here in the mountains of Western North Carolina). You just want to be pragmatic and realistic, particularly when your company’s future is at stake.
For instance, what would happen if one of your key employees left for a higher-paying job? What would happen if your biggest customer stopped doing business with you? These are two not-unlikely scenarios that can be highly disruptive to any new business. Anything you can do to reduce that risk is worth considering.
3. Don’t partner with investors who can only offer money
Another important partnership dynamic to consider is the relationship you share with your investors. Don’t partner with an investor if all they can bring to the table is money. You want to work with investors who can contribute more than just a dollar amount. A great investor brings relationships and knowledge to the company in addition to cash.
The ideal investor is someone who knows your company’s space well, and who understands your business model. Not only are your interests aligned with theirs, but your personalities gel. They get what you are trying to build, and their investment represents just one part of their commitment to help you build it. If you want to build a company to leave to your kids, and your investor is looking to build up the company to be sold in five years, that’s not a good alignment.
4. Partnership due diligence
One final thing to consider when considering any new partnership is that you need to do your homework. Don’t get your teeth knocked out by making an avoidable mistake. If you’re bringing on new employees, you probably want to do basic stuff like background checks, drug testing and satisfying all the employment requirements of your state.
Check everyone’s references. I can’t stress this enough. Not everyone is really who they say they are, and most of the time all it takes is a phone call and a quick conversation to get the real story. There’s no better way to get a sense of who that other party really is than simply by talking to people about them. Don’t just do this for employees, either. Do it for everyone, from vendors to potential investors.
5. Do business, don’t play business
One of the real appeals of an early-stage company is the sense of freedom and the lack of formality. It can be fun to invent things as you go, and to have that feeling of “building the airplane in the air.” Who needs all those rules and red tape, right?
That’s a great feeling to try and capture, particularly when it comes to creating a company culture and developing unified sense of a shared mission for your team. But when it come to things like strategic planning and contracts, acting like a business still matters. Everyone who has invested their time, resources or money in your company has taken on some degree of risk, and it’s just a game to them.
These are people who have placed their trust in you, and you owe it to them to protect their investments as much as possible. In other words, you need to be a good partner.