Business partnerships provide a variety of benefits to women entrepreneurs. For example, women with complementary skill sets or ways of thinking can partner to offer their customers a more well-rounded offering or experience. Women with similar interests and business styles can partner to offer their customers more options. While some entrepreneurs rush forward into a partnership, throwing caution to the wind, others take their time, evaluating every minute detail of a potential partner before signing the papers. Both types of processes can yield a successful partnership – however, due diligence is essential in improving the odds that a partnership will work well for both partners.
Continuing research delves into the intricacies of business collaboration – and reveals important steps to follow. Based on professional market research of more than 3,500 women in business, research has shown that each of five unique types of business owners has a unique approach to running a business and to handling the other details of her life – and therefore each one has a unique combination of needs. This article outlines surprising trends in creating partnerships, as well as an outline for practicing due diligence before cementing a business union.
Research revealed that while some business owners “went on gut instinct” when pairing up with other entrepreneurs, others partnered with family members they’d known for years, or put their potential partners through a strict rubric before joining with them. While it is entirely possible for a partnership to work out fine without intense upfront evaluation, good chemistry and gut instinct are not the be-all, end-all. That’s why it is essential that business owners carefully evaluate the qualities of their potential partner before proceeding. The more dependent an entrepreneur will be on her partner for personal and professional well-being (including income, stress level, and freedom), the more important a thorough consideration of that individual’s qualities will be. For example, a writer who needs an editor may hire one more quickly knowing that if they do not work well together, the writer will maintain control over her book and can end the partnership quickly, with only time and a little money lost. When the partnership is longer-term, however, or when the partners are reliant on each other’s ability to produce an income, thorough due diligence can save headaches, heartaches, time and money later.
The amount of due diligence a business owner puts into finding the right partner depends, also, on how well her gut instinct usually serves her. For example, if a business owner tends to see the best in people and to give them the benefit of the doubt, she should require herself to perform a higher level of due diligence. Depending on the situation, this may include extensive reference checking or even a request to examine the potential partners’ personal or business finances. On the other hand, if a business owner has partnered successfully many times and found her instincts consistently “spot on,” she may need to invest less time and effort -- although any decision that affects a business’ future still merits at least some research.
The bottom line: research shows that many business owners have been burned through partnering with the wrong individual. While it is possible to have a successful partnership based solely on luck and good chemistry, It is imperative that a business owner perform at least some due diligence before leaping into the business equivalent of marriage, to save herself from future headaches, heartaches, lost time and lost money.
Michele DeKinder-Smith, is the founder and CEO of Linkage Research, Inc, a marketing research firm with Fortune 500 clients such as Starbucks, Frito Lay, Tropicana, Texas Instruments, Hoover Vacuums and Verizon Wireless. She parlayed this entrepreneurial knowledge and experience into founding Jane Out of the Box, a company that provides female entrepreneurs like YOU with powerful resources, such as educational blogs, teleclasses, newsletters, and books. Michele was recently named to the National Association of Women Business Owners national board of directors for a two-year term. Buy a copy of her latest book with coauthor Azriela Jaffe, “See Jane Collaborate,” which contains more in-depth information about this article’s topic, at www.seejanecollaborate.com.