Partners must bring more than friendship to table

Partners should be selected for what they can bring to the business with respect to human capital, social capital or financial capital.
Too often business partnerships are developed for all the wrong reasons:
• We’re friends, we went to school together and it would be fun to go into business.
• We have such a great working relationship in our last job; it can certainly work just as well in our own business.
• You’ve been such a great boss, of course I’d like to go into business with you as your partner.
• As a husband and wife team we will do great together in business, after all we have a great marriage.
None of these reasons, in and of themselves, is a reason to select this person as your business partner, whether a startup company or a growing business that can afford to hire staff. Unfortunately, far too often, these are still the reasons why people form partnerships.
Can it work? Yes it can. But it can only work if the partner has value to bring to the table. Unless they have value that is accretive to the business, the partnership is not only a financial drain on the business, but very often can be an interpersonal drain as well.
Consider the value partners can, and should, bring to the business:
• Human capital: Does this person have skills that are unique and important for business development and growth?
• Social capital: Does this person have connections?
• Financial capital: Does this person have capital to invest or access to capital?
Let us look at each of these capitals in more detail and frame how each can benefit the business and a partnership.
Human Capital is about skills and talent. What does each partner have that is not part of another partner’s skill set? Sure there can be overlap, but too much overlap is redundancy.
Businesses need these skills:
• Managerial experience.
• Experience with a previous startup(s).
• Content skills based on what product or service the business will offer.
• Technical.
• Financial.
• Sales.
While this list is not exhaustive, it is indicative of the type of skills needed to run a business. When selecting your partner(s):
• Inventory what you bring to the table.
• Define what skills and talents will be necessary to start and/or grow your business.
• Identify where the gaps are between your skills and the needed skills.
• It is within these gaps that the “job description” of your partner resides. One efficient way of doing this is to make an organizational chart of what is required when your business is up and running (and growing) and look for boxes with no names in them.
Social Capital falls into the category of who you know and who you know who know people that can be helpful to the business. We are in a connected world, and connections – or should we say, meaningful connections – are a great asset to your business.
Social capital can help with finding people who:
• May have the skills and talents you need for your business.
• Know people who may have the skills and talents you need to grow your business.
• May be potential early-stage buyers for your product or service.
• Are well-connected and can help you get the word out about your product or service.
• Can help find you money.
Social capital is important. Connectors are important because in a highly connected world that’s shrouded in a veil of economic uncertainty and a sea of sameness, it is sometimes a challenge to get people’s (read – buyers) attention. And one way to break through that is through meaningful connections.
Financial capital. We have all heard that cash is king. And, it certainly is. No cash, no business. It’s as simple as that. So access to cash and the ability to manage cash is important.
But often times we find that some business owners believe that “if I only had more money, if I only could get the tax break, the business loan, the line of credit, I would be able to grow my business” – perhaps but not necessarily.
If you don’t have:
• The people with the right and complementary skills and talents to grow the business.
• The connections needed to find people, buyers and money.
Then money may just delay the inevitable.
So if you are seriously considering a partnership, look at what each person can bring to the table.
Now for purposes of this demonstration, we chose managerial, technical and social. When you complete your organizational chart to help define what your business needs, you are likely to come up with different skills. The point is to ensure that there is minimal overlap of skills in your partnership and that the skills brought to the partnership are the ones needed to grow your business. •


Tony Kubica and Sara LaForest are partners in Kubica LaForest Consulting.

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