Business is another word for relationship.
And that is where things get interesting.
Like marriages, many business partnerships fail. To compound matters, there is also a greater likelihood that it will end in a legal proceeding.
As an executive, how can you sidestep both negative outcomes? Well, you can start by selecting better business partners. The next time you find yourself looking for a business partner, spend more time upfront asking probing questions that can reveal possible red flags for you in the long run.
Remember, the secret to better answers are better questions. Feel free to pull from the following to increase the chance of a successful partnership:
What can you tell me about yourself?
This question seems quite innocuous, but it is extremely strategic. The response will tell you how well the prospective business partner can communicate, which is an important factor in any successful partnership. The answer should be tailored to the opportunity, not a recap of the person’s life. In addition to communication skills, this question will reveal if the person conducted due diligence before the interview.
What is your “why?”
You never really know someone until you know what they want. Motivation is key, so ask about it early in the process.
What does success look like?
We all want to be successful, but what does that really mean? For some, it may mean growth or money. For others, it may mean more control over their time. These are different looks at success. Get clarity sooner rather than later.
A breach of the partnership agreement, for example, is a common cause of a failed business partnership. During the interview process, you must ascertain whether the prospective business partner has a vision of success that jibes with the partnership agreement, which typically includes insight into business operations.
What is your competitive advantage?
Learning about a prospective business partner’s strengths could help you determine the business structure. In the partnership agreement, you could spell out how each partner would be responsible for their respective areas of expertise.
What are your areas for development?
Identifying weaknesses is just as important as learning about strengths. This information will give you a more complete picture of where this person would fit in the organization—if at all.
How would you describe your management style?
Are you a visionary leader or a transformative one? Do you take charge yourself or delegate? Knowing the management style of all your business partners speaks to expectations, teamwork and, ultimately, business operations. Before profit and losses, it is about intangibles.
How would you describe your communication style?
You can’t be a leader without followers, and you can’t have followers without communication. Communicating tends to be the make-or-break variable in any equation involving a relationship. So, does the prospective business partner have a passive or aggressive communication style? Or is it more assertive? Assess the words, tone and actions during the interview. Now, ask yourself: How would this person fit in with other partners?
Unfortunately, failure to delineate authority is a common reason for business partnership breakups. To ensure the partners aren’t shirking their responsibilities or overstepping into another partner’s area, communicate in terms that all parties understand and reinforce in the partnership agreement.
What will you need from the other business partners to be successful?
From day one, it is important that your team members are put in the position to succeed—because when they win, you win. Learning about which resources they will need in advance will help you to determine the true cost of bringing this person on board. Do the requests logically align with the roadmap that was presented? Is it realistic?
Can you describe your current workday at your most recent firm?
Past behavior may not be a guarantee of things to come, but people tend to be creatures of habit. You should know in advance if the prospective business partner believes in working around the clock or four hours a day. This expectation could have a positive or negative impact on the rest of the partners.
Partnership abandonment happens, which can result in a breach of fiduciary duty. The partnership agreement should define partnership work and business operations to make expectations clear and concise.
What is your exit strategy?
This question is another way to ask about the person’s “why” in an inconspicuous manner. When you want an honest answer to an important question, make sure you ask for it several times in different ways. The composite will tend to be the real answer.
(Joseph M. Pastore III is chairman of Pastore, a law firm that helps corporate and financial services clients find creative solutions to complex legal challenges. He can be reached at 203.658.8455 or email@example.com.)
Tags: Business Partnership, Joseph Pastore
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