Knowing who to trust in Business...Im not sure

[AMBITIOUSBOY]

I have a few really good business ideas but want to start them with someone else another motivated ambitious person. Im just not sure how to go about finding another entrepreneur to start this business venture...or to say someone I can trust to start a business with.
Does anyone have any good suggestions?

 

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[lightning]

If youre not SURE you can trust them, you shouldnt even entertain the idea of entering into a partnership with them yet.

Most business partnerships are formed with pre-established relationships (ie: they already know and trust the person completely). I would think some are also built on referrals (where two people are brought together for a very mutual idea or "plan" through a mutual aquaintance). It also depends on the complexity of your idea. If you wanted to start say a landscaping business, I wouldnt think it woudl be as hard to find a partner willing to mow lawns everyday as it would be to find a partner you can trust in an internet startup.

Overall, Id be very very careful. A partnership may be the easiest way to get a business up and running quickly, or it may be your worst nightmare that you become trapped in. Start looking and networking with people who share interests in a specific field or industry, and go from there. Better yet, write and formulate a business plan, and start looking for INVESTORS who can help fund your idea to get it off the ground. You may find you dont even need a partner.

Good luck.

 

[Andrew]

There are people I'd trust with my life that make horrible business partners, and I know this from first hand experience.

Whats more important is how everything is structured both in terms of legal ownership and also incentives.

Too much to go into detail here.. but now when I do business partnerships I run them on a per-project basis. Whatever you do, there should be a good and rational reason why. What happens if things flop? What if they are wildly successful? What if the other guy stops working? And so on..

 

[fanocks2003]

I have a few really good business ideas but want to start them with someone else another motivated ambitious person. Im just not sure how to go about finding another entrepreneur to start this business venture...or to say someone I can trust to start a business with.
Does anyone have any good suggestions?

Elaborate a bit further. This other partner would deceive you in what way?

 

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[Diane Kennedy]

Why a partner? What do they bring to the table that an employee or independent contractor would not?

 

[Russ H]

Big rep points for Diane's question.

It's short, but there is a HUGE amount of past business experience here.

I would second her question.

I have worked w/LOTS of subcontractors and employees.

Very few partners.

You want to make lots of money?

Look at how to structure a business w/OPM, OPT, and OPR

(other people's money, time, and resources).

Leverage.

-Russ H.

 

[AroundTheWorld]

Agree w/ some of the above... could an employee or contractor provide what is needed?

Having said that - - - here are some things to consider.

Does the person have an abundance or scarcity mentality?
Commitment level match? (Will this venture be a priority or a side biz?)
Is the risk tolerence level a match?
Values.... integrity? honesty?

Test drive it first with a very small project before you make any long term decisions.

And... lay out your exit strategy upfront. Every partnership eventually ends. Know how it will end. Know what you will do when the money runs tight (who ponies up?). Know what you will do when the money is flowing. (when does everyone get to draw?)

 

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[keelba]

I apologize if I'm wrong but it sounds like your motivation for wanting a partner is fear; that you want someone else to share the burden of risk with you. This is a very bad reason for forming a partnership. I want to impress upon you and scare you how dangerous partnerships can be. MOST partnerships fail. There are some that have been successful such as Ben&Jerry, Bartles&James, Ernest & Julio Gallo, Parker Bros., etc. But these are the exception, not the norm. Even the beloved Rich Dad, Robert Kiyosaki himself, could not make his partnership with Sharon Lechter work.

If fear is your motivation for finding a partner then you too will most likely fail. A partner is not going to make your life any easier. A partner is not going to magically make everything all better and make your business work. A partner is not there to ease your burden, make you rich or do your work for you. These are all things, as an entrepreneur that you must take on yourself. Only when you can handle these things should you consider finding a partner. And then your partner must show that he too can handle the stress and these responsibilities.

Think of a partnership as a marriage. In fact, a marriage is another partnership. You must have valid reasons for getting married or for forming your partnership. What do you bring to the table? What skills do you want your partner to bring to the table? You must have clearly defined roles and responsibilities. You must trust in your partner but that does not mean to trust that they will not steal from you. You should have systems in place to prevent them from stealing. Instead you need to trust that this person will fulfill his established role and he needs to trust in you the same. This is usually where the partnerships fail.

As an example of this think of a partnership in a florist business. You and your partner agree that you will be in charge of arranging flowers and maintaining inventory while your partner will be responsible for marketing and customer service and accounting. After a few weeks you realize that your partner wakes up late every morning to watch TV, never spends any effort or money for marketing and never shows up to help deal with the customers or take care of the bookkeeping. You end up doing all the work yourself and giving away half of your profits. Needless to say, this partnership will end soon and end bitterly.

Please be very careful when considering a partnership. They rarely succeed and usually end family relationships and friendships and frequently end in lawsuits. Instead try to start this business yourself and hire people for the specific jobs that you cannot handle. You may even consider offering a piece of the company in exchange for their work. Make sure that your offer is clearly defined in what you are offering and what they should do to receive their piece. If they do not perform you should not be obligated to give away your company.

 

[RealOG]

Something to add: make sure your partner brings something of value to the partnership.

I have a very close friend who is a great businessman. Very trustworthy and great ethics, but we have never partnered because we are too similar. We both bring the same skills to the table. We always have wanted to, but I lack the skills he would benefit from (and vice versa). Like a football team with all quarterbacks...

Lastly, I totally echo what ATW said, "lay out your exit strategy upfront". This cannot be understated. Even when things are going well, complications can arise despite the best intentions. Try to forsee these things prior to entering the partnership. A documented partnership agreement drafted up by an attorney can go a long way - they can identify what to do in situations before they arise (financial insolvencey, injury, death, etc.).

Makes for smoother sailing.