Ask SmallBiz: Search for a Financial Partner
BY EDWARD YOUNG, PROJECT OUTREACH COORDINATOR AT HAWAII TECHNOLOGY DEVELOPMENT VENTURE
Q. My engineering design firm is developing traction with customers. While I’m comfortable with the technology development, I need a financial partner to manage what is growing wonderfully. How do I begin my search?
A. First of all, I commend you on recognizing your limitations in growing your business. Too often, entrepreneurs become overwhelmed with taking on all the responsibilities of running a business. Building a team with complementary strengths is the right approach.
Profile your company operations and needs. Make a list of the skills and experience you will need to make your business a success. For example, a CEO with business skills to build the company’s infrastructure, develop strategic alliances, make sales and raise funds; a COO with skills to manage the operations and marketing; a CTO with abilities to invent and design products; and a CFO to manage the company’s finances. Then check off the skills you possess and the skills that are left on the list are the things you need to look for in a business partner. The best partnerships work because each partner brings something different to the relationship. “Date” first. In developing a partner relationship, an attorney I worked with advised me to structure the partnership dissolution plan first – you can never know everything about a person. That’s sound advice from a professional service provider, experienced in negotiating disagreements between partners. Several of those partner relationships exceeded 20 years. A partnership is very much like a marriage and more, since you may be spending more time with your partner than your spouse.
Start with getting to know your prospective partner. Interview him or her and ask questions about everything you can think of about his or her experience, the business and potential issues. You will uncover personality traits that you can and can’t work with. Choosing the wrong person can lead to a lot of time and money lost. You may decide to engage in some form of business collaboration first, such as jointly bidding on projects or subcontracting. This will allow you to observe how the prospect engages in business transactions and interactions with you. A business partnership is a major commitment, you should build a strong relationship with potential partners before committing to work with them.