How well do you know yourself and what drives you? More importantly, how well do you know your business partner or the person you are considering partnering with (or forming an LLC or corporation with)?
For a business partnership to work, you need good documentation outlining rights and responsibilities. That’s a given. But even before you get to that point, you need to choose business partners who are compatible with you. Are they in sync with you in terms of goals, outlook, needs and desires? That is the kind of question you should ask.
Sometimes having different strengths and weaknesses can lead to a stronger business, because each partner complements the other nicely. However, if your goals and driving desires are completely at odds, it can be a recipe for disaster. Two partners in a business who are mismatched may just lead to irreconcilable differences.
Let’s look at an example. Say one partner pushes herself to work 12 – 14 hour days while growing the startup, is always going after new customers and growth, and gets a thrill out of developing a big vision. Her partner, on the other hand, craves a balanced lifestyle, values hobbies, doesn’t want to be told what to do, and wants to leave promptly at 5:15 each day. Family time to him is uber-important. He is happy with doing a great job serving a small number of customers and is uncomfortable with fast growth or growth for growth’s sake.
If neither partner can understand where the other is coming from and find common ground, it won’t be a long-lasting partnership. The partners will constantly be butting heads over how many hours each puts in the business, how much risk each is willing to take, whether growth is good or not, their definitions of success, how much to expect out of employees, and so on. Instead of appreciating the partner’s strengths, the other partner will just find failure and fault. Eventually it will lead to resentment, anger and disappointment.
When considering a person as a business partner, you may find it helpful to consider “psychographic” styles. Psychographic merely refers to the personality, values, attitudes, interests, or lifestyles of a person.
According to research by the Corporate Executive Board, small business owners tend to fall into one of the following three psychographic profiles or personas. Do recognize any of of these in yourself or in other business owners you know or work with?
Freedom fighters are motivated by a feeling of independence. They:
- Prioritize independence over growth
- Like control over who they deal with and their clients/customers
- Value leisurely pursuits
- Value bottom line profits, over top line sales growth
- Are community focused and value customer service
Picture mountain climbers as striving for lofty goals. They:
- Desire growth for the thrill and the challenge it provides
- Are focused on the future and set quantifiable goals
- Have big picture visions that drive them
- Tend to be serial entrepreneurs
- Are demanding on their employees and are ego-centric
The craftsperson persona is good at his or her “craft.” He or she is:
- Motivated by mastering a subject or type of work
- Risk averse
- Often runs a home-based business
- In business to be paid to do what he or she loves and is good at
Most business owners fall into the “craftsperson” persona — about 75% — according to the Enterprise Council on Small Business’s research. Only a tiny percentage (2%) fall into the “mountain climbers” group. The rest (about 23%) are “freedom fighters.”
Of course, these are merely personae. Many people will have a bit of the characteristics of each in them, to one degree or another. These personae are not intended to be stereotypes, but are intended to be helpful in understanding what motivates and drives other entrepreneurs. If you can learn to spot what is driving a person, it can tell you a lot about what he or she will be like to work with.
When considering a business partner, think about these personae. Make a conscious effort to spot these types in any potential business partners you are considering, and determine whether you are in sync with their style and value system. Knowing that may just increase your odds for success — or help you dodge a bullet.
Ready to start a business by yourself or with a business partner? Talk to CorpNet.com for a free business consultation on how to incorporate a business. CorpNet’s free tools, advice and guidance can help you choose a business structure, form an LLC, set up an S-Corporation or other corporate entity to protect your assets and attain the corporate tax benefits and financial advantages of doing business as a corporation or an LLC.