11 Essential Qualities to Look for in a Business Partner

In our last post, we discussed when it makes sense to bring on a business partner and when to consider a different approach. This week, we outline what to look for in a business partner. Of course, every partnership is different, and the motives for forming a partnership vary widely from firm to firm. As such, the first step is to determine which elements matter most to you. Do you want a silent partner who will invest without directing the future of your firm? Are you looking for someone who will challenge you creatively or someone who will offer resources and network connections? Beyond these foundational elements, it’s essential to find a partner who has the ability, expertise, and creativity to drive growth in your firm. They should also share your vision for the future. From complimentary skills to shared values, here are eleven qualities to look for in a business partner for your firm.

Qualities to Look for in a Business Partner

#1 Complementary Skills

The first attribute to look for in a business partner is a skill set that complements your own. To create a well-rounded team, business partners should have different strengths and weaknesses that complement each other. 

For example, if you are great at sales but struggle with organization, you may want to find a partner who excels in project management and can help keep everything running smoothly behind the scenes. On the flip side, there is little value in bringing on a business partner who is your carbon copy. In an article for Entrepreneur, Jessica Dennehy warns that “if you both bring similar qualities, then you are simply duplicating efforts.” 

Having a complementary skill set not only helps ensure that all aspects of your business are covered. Complementary skills also allow for more efficient delegation of tasks. Instead of both partners trying to do everything, each person can focus on their areas of strength. They can trust their partner to handle the rest. 

Of course, it’s important to remember that having complementary skills doesn’t mean that you will always work together seamlessly. Communication and compromise are key when it comes to any partnership. Make sure that you and your potential business partner share similar values and goals before committing to working together. 

#2 Compatible Personality

Compatibility is also key. Starting a partnership with someone whose personality clashes with yours is a recipe for disaster. You and your potential business partner should have a shared work ethic, compatible communication style, and similar approach to problem-solving. 

Compatible business partners will be able to communicate effectively with you and understand your perspective without causing unnecessary conflict. They’ll also be willing to compromise when necessary and work towards common goals that support the future of your successful company. 

Remember that finding a compatible partner takes time and effort. Don’t rush into a partnership just because you think it’s convenient or profitable. Take the time to build a relationship based on trust, respect, and mutual understanding. 

#3 Shared Vision

Third, make sure that your partner’s goals align with your long-term strategy for the firm. A shared vision is crucial because it ensures that everyone is on the same page from the very beginning. It helps to prevent misunderstandings and disagreements down the line, as well as ensure that everyone is working towards the same goals. 

Before signing that partnership agreement, make sure their motives mesh with your vision for the company. For example, don’t partner with someone who is looking for a quick sale if your goal is to scale. You want your new partner to help push your business forward in the right direction.

#4 Shared Values

Just as their vision for the firm should align with yours, so should their belief in the mission of your company. Shared values — such as work ethic, social responsibility, and trustworthiness — are key to forming a successful business partnership. 

If you and your partner share the same values, you’ll be able to work together more effectively and efficiently. You will also be able to establish and respect each other’s boundaries. You’ll be able to trust each other’s judgment and decision-making abilities — confident that you’re both working towards the same goals. 

So how do you determine whether or not you share values with a potential partner? Start by having an open and honest conversation about what matters most to each of you. Ask questions about their approach to business ethics, social responsibility, and long-term planning. Listen carefully to their responses and look for areas of agreement and disagreement. 

Remember, finding a partner who shares your values isn’t just about avoiding conflict – it’s also about building a strong foundation for success. When you and your partner are aligned in terms of your core beliefs and principles, you’ll be better equipped to weather any challenges that come your way. 

#5 Access to Financing

Access to capital is absolutely necessary if you hope to scale your firm in the future. Without access to loans, RLoCs, or equity investment, financing an expansion might not be possible. That’s why firm owners often search for a business partner who can provide financial support. 

Perhaps your personal credit score has taken a recent hit, or your business credit history is in its infancy. A business partner might have a better credit score and access to more favorable borrowing terms. 

Or perhaps you need someone with more experience and financial literacy than you. You might want a partner with experience securing loans, managing cash flow, and making smart investments. 

Maybe you want a partner who will invest in the business without influencing major decisions. You want them to have financial obligations, but little control over your firm. Remember, not every partner needs to participate in business operations. You could opt for a silent partner. 

#6 Creditworthiness

As noted above, creditworthiness is another quality to look for when choosing a business partner. Your partner’s credit history could either positively or negatively impact the firm’s ability to secure investments and access lending opportunities. The health of their personal finances might also demonstrate their level of fiscal responsibility. 

#7 Industry Connections

Next on our list of essential business partner qualities, you’ll want to look for someone with industry connections. Having a partner with strong connections in your industry can be incredibly valuable for business development. If your partner has connections with key players in your industry, they may be able to introduce you to vendors, clients, or mentors. They might also be able to secure invitations to important industry events. 

Of course, it’s important to remember that not all industry connections are created equal. You’ll want to look for a partner who has connections with people or organizations that align with your business goals and values. 

#8 Expert Knowledge

Industry knowledge and expertise are also key when bringing on a business partner. Again, look for complementary expertise when courting prospective partners. A partner who has the exact same experience and expertise that you do provides very little added value. If you have to train or educate a partner who has no expert knowledge, you might as well hire an employee instead. 

#9 Excellent Communication and Problem-Solving Skills

Next, remember that a successful partnership requires open communication, trust, and positive relationship dynamics. Creative problem-solving, mutual support, and willingness to handle conflict constructively are key components of a successful partnership. These traits can make or break a partnership, so it’s crucial that your potential partner excels in both areas. 

Firstly, let’s talk about communication. In any business relationship, clear and effective communication is key. This means your partner should be able to clearly communicate their opinions and actively listen to you, the other partner. According to JT Allen in this YEC Council post for Forbes, “a good business partner is direct.” The right business partner is also honest. As Allen notes in the aforementioned Forbes article, “you don’t have to guess if they said what’s on their mind or how they feel about it…they tell you.” 

Now, let’s move on to problem-solving skills. No matter how well-planned your business strategy is, problems will inevitably arise. A partner with strong problem-solving skills will be able to think creatively and come up with solutions that work for everyone involved. They’ll also be able to stay calm under pressure and not let setbacks derail your progress. 

#10 A Similar Level of Risk Tolerance

Before taking on a business partner, it’s important to assess their level of risk tolerance. If you have very different risk tolerances, it can lead to conflict and disagreements down the line. For example, if one partner wants to invest heavily in a new service line or marketing campaign while the other is hesitant to spend too much money, it could cause tension between them. 

Ideally, you want to find a partner whose risk tolerance aligns well with your own. That way, you can make decisions together without constantly butting heads over how much risk to take on. 

#11 Willingness to Defer to You

Throughout this post, we have underscored the importance of functional relationship dynamics. As a firm owner, you might think that partnership means a fifty-fifty relationship with another professional. This is not always — or even typically — the case with business partnerships. Unless you are starting from scratch, your partnership doesn’t have to be fifty-fifty in ownership or control. 

In fact, business experts often recommend against even-split partnerships. With a 50/50 partnership agreement, you are more likely to stalemate over key decisions. Think about it: how would you handle disputes when both partners have an equal say and neither must defer to the other? Who would eventually concede? How long would that take? 

Look for a partner who brings value but is willing to defer to you if necessary. Consider a 70/30 or 60/40 split when taking on a partner if you want to maintain control while benefitting from their skills, perspective, and expertise. 

What to Include in a Partnership Agreement

Before formally partnering, you’ll need a legal document that outlines your arrangement. This agreement protects you, your partner, and the firm in case of death, dispute, or another life-altering event. 

But what should you include in a Partnership Agreement? In an article for Foundr, Jesse Sumrak elaborates. He recommends that you include “goals for the business, salaries, roles, and responsibilities, equity percentages, ownership of the brand…and exit strategies.” 

You should also address potential hiccups — even if doing so is uncomfortable for you and your partner. According to Than Merril in an article for Fortune Builders, you must address “the five D’s of business partnership” in your agreement. These “five D’s” are death, disagreement, debt, divorce, and disability. 

What happens if your partner passes away, if you have a major disagreement, if they declare bankruptcy, divorce a spouse with whom they share finances, or become disabled or perilously ill? Discuss all five with your partner, and work with an attorney to ensure the agreement protects your firm.