What To Look For In A Business Partner
By JD Esajian on January 6, 2016
One of the best ways to grow your business quickly is by taking on a business partner. The right partner can help you find and close deals that you would not have otherwise. As great as the right partner can be, however, aligning yourself with the wrong partner can have equally negative consequences. Instead of working together, you will devote time to petty squabbles or resolving conflicts. It is easy to be tempted to work with someone who seems like a good fit on the surface. Regardless of how well you know someone, you need to take the time and make sure you are both on the same page before you do anything. If you are considering a business partnership, here are the top five things to look for:
1. Area of expertise: Partnering up with a close friend or work buddy just to form an alliance doesn’t really serve a need. Anytime you consider a partnership, you need to ask yourself what they bring to the table. The most common form of partnership in real estate is when one person handles the finances while the other deals with the real estate side. You can also have both partners work together on finding deals or growing your business. One of the misconceptions is that you need to share all of the same ideas. A partner that agrees with you on everything isn’t always the best thing. It is OK from time to time to disagree on a specific deal or even have a philosophical difference. Whoever you partner with, they need to add value to the partnership. Without this, you may be adding more trouble than it’s worth.
2. Trust: When looking for a partner, you need to make sure it is someone you can trust. There should never be a sort of shotgun marriage to your partnership. It is fairly easy to find a potential partner at a networking event or real estate investment club. Even if you share some of the same ideas you still need to have a trust factor. Before you do anything together you should ask yourself “how well do I know this person”? Do I feel comfortable having them handling my money or putting my name on something. Once you enter a partnership they are a direct reflection of you. A partner that talks down to an attorney or real estate agent may come back to you. It is important that you have the trust that they are going to act accordingly at all times. This means not crossing the grey area of ethics or doing things you don’t feel comfortable with. Even if the partnership would be considered short term you need to be able to trust your business partner.
3. Same fundamental beliefs: As we mentioned, some of the best partnerships have differing ideas of how to run a deal. A different idea or different way of looking at things is healthy when properly discussed. What is important with any partner is to have the same set of core fundamental beliefs. This could be anything from how and where you find deals to how you treat people on your team. It can mean dealing with homeowners the right way and staying ethical even in the face of losing a deal. You never want to have to worry that your partner is doing something that you don’t agree with. Before your partnership gets off the ground you should sit down and have an in-depth conversation on their real estate investing philosophy. Not every would be partner will be the best fit for you. This doesn’t mean they are bad people just have different ideas. Your partner needs to have the same set of core values and beliefs as you do.
4. Loyalty: Do you trust that your partner is not talking behind your back? When you enter a partnership you are now on the same team with the same common goal. There will be ups and downs but you need to be confident that you are in it together. If you make a decision that ends up being the wrong one will your partner stick with you? Do you think they are finding deals behind your back and working with someone else? If you make a decision to work together you need to accept that there will be some rough times with the good. You should feel that your partner will always have your back and fight for you every step of the way
5. Flexibility: Things in the real estate business change all the time. In the course of just a few months, you can completely change the way you do business. You need a partner that is open and flexible to change. You may have never thought to look at a certain property type or location but it may be what works in today’s market. If your partner is stuck in their ways and committed to doing things the way you always have you may not grow like you need to. There is nothing wrong with simply asking your partner how they feel about new things or if they would ever consider something else. Not every new idea is a good one but you and your partner should at least be open to thinking about alternatives.
Even the best partnerships have disagreements and arguments from time to time. These are not always a bad thing. If you focus on these five areas, you will have stronger partnerships that can stand the test of time.