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Home » Business And Finance Articles » 7 Keys To Identifying An Ideal Partnership

7 Keys to Identifying an Ideal Partnership

In the world of small business, it seems there is often a common quest: to find the ideal business partner. Usually this stems from a need to "get rid of" the roles or tasks that we struggle with. Like marketing, finance or sales.

I know when I first started my business I was desperate to find a partner who was better at marketing and sales than I was. I was convinced that if I could get that off my back and just focus on being a great coach that my business would thrive! Well four years later, I never did find that partner but I did find a way to experience a thriving business.

I realized the value of marketing partners.

Marketing partners are other entrepreneurs who are willing to cross-market your products and services to their prospects and clients.

But there is still a catch. And it's the same kind of catch that comes with any type of partnership â€" from marriage to business.

Not everyone is "ideal partner material." It's kind of like kissing a lot of frogs before you find your prince (or princess.) Sometimes you have to get clear on who you want to play in the sand box with so you don't have to kiss too many frogs. So I thought I'd share with you my 7 Keys to Identifying an Ideal Partnership.

Partnership Mindset. Does this person really have what it takes to be a partner? Not everyone is cut out for it. As a matter of fact, some people make lousy partners because they are just too independent or they don't like playing with others in their sandbox. It's important to understand why someone is pursuing a partnership. Do they just want quick sales or are they really excited to align with your business long-term?

Alignment of Values. Knowing your top 3 values can help you clarify if you have what it takes for the long-haul. If one person's core value is independence and the others' is collaboration, it may make for a rocky approach to achieving the goal. This is particularly important if you are joint-venturing on a project deliverable.

Shared Vision. Do you share a passion for what the outcome looks like? Do you both see a similar outcome? Or does one person want to go off on their own opportunities and the other wish to have a long-term alliance. Have you ever known a married couple where one wants kids and the other doesn't? Eventually they part ways. Sharing a vision of the desired outcome is important to keeping harmony in the relationship.

Compatible Work Styles. This is a biggie. Do you both envision working long, hard hours to accomplish the goals? Does someone have kids that require their attention first? Are you both willing to do whatever it takes to get the job done?

Complimentary Strengths. If you both love to do the same thing and no one wants to do the other stuff, then you will have work out how that gets done. Will you outsource it? Or will someone learn it? Make sure you are both qualified to do what your role is â€" or else it can lead to tension and frustration.

Just as you would take time to explore if your love interest would make good marriage material, I encourage you to take some time to explore if your fellow entrepreneur would make good "partner" material. There is nothing worse than finding out in the middle of your project that you don't like doing business with the person.

Once you have explored the keys above and are ready to move forward, be sure to establish your working agreement (I even suggest having a contract.) If you follow the steps in the Unstoppable Goals Method together, you will find that you have a strong foundation to create "unstoppable" success together.

Happy partnering!

And here is another random article you might be interested in...

Investing, Are You Ready?

Before entering the world of investing, it is important to honestly analyze your present situation. Doing so will allow you to effectively manage your own money in a way which maximizes returns while limiting unwanted risk. Questions to consider include:

What is my investment goal?

How much time do I have to attain this goal?

Methods of saving for a down payment on a house differ greatly from saving for retirement. The reason for this lies in the factoring of time. Over short periods of a few years, individual companies and the stock market as a whole can experience dramatic fluctuations which in no way represent longer-term trends. Because of this possibility, a smaller percentage of your portfolio should be allocated into stocks as the time for cashing in your investments draws near. Conversely, the longer the time period you have to invest, the more aggressive your portfolio should seek higher returns.

How much do I initially have to invest?

How much can I afford to consistently add later?

Einstein described compounding as "The Eighth Wonder of the World" and for good reason. Being able to earn interest on your interest allows investments to increase exponentially faster than with simple interest. A one-time investment of $5000 earning 10% interest compounds to a total of over $54,000 after 25 years. Using simple interest, it would take over 95 years to reach the same amount. Naturally, the larger your initial investment and the more you can afford to add later on, the more you can expect to gain in returns.

Am I carrying any high-interest debt, such as on a credit card?

Before saving for future events, you should consider your present finances. Paying off any high-interest loans function as an "automatic" return. Writing a check to Visa to pay down your debt may not feel as satisfying as starting a nest egg, but by eliminating those 22% interest payments, you have effectively "made" a 22% return. Although you need not completely eliminate your debts, getting such payments into a reasonable area should be a more pressing priority.

This fiscal reckoning is also a good time to examine budgeting and expenditures. Look for unneeded or overpriced purchases, and consider the feasibility of paring them down and saving the extra money. Unused gym memberships, that $5 whipped mocha-hazelnut cappuccino, and extra cable channels all add up. The true cost of these and all other purchases involves understanding the "time value of money", but for now it should suffice to say that $5 added to the previously mentioned investment account compounding 10% for 25 years turns into $54.17.

What is my risk tolerance?

What will my investing style be?

These questions lead us to selecting individual investments. Consider your investment timetable for when you'll need the money, recognizing that more conservative selections should be made the shorter the window. Everyone's risk tolerance is different; while one person may feel comfortable with small-cap biotechs another may need a blue chip to feel equally sound.

Analyzing the risk to reward ratio here is a good first step. The more risk you take on, the more you should expect to get in return if your investment pays off. The inverse is also true: the more stable an investment, the less return one should expect. Government-backed I Bonds pay over 6%, but involve tying up money for years in order to fully benefit from them. While this gives you one target, the average return of the broader market indices is about 11% per year. There are two primary schools of thought about investing: growth and value.

Growth

Growth investing is a higher-risk strategy which focuses on finding smaller companies poised to rapidly grow earnings. Stocks here tend to be micro-caps or small-caps, and the occasional mid-cap (under $10 billion). In their younger lives, many of the well-established companies of today found themselves considered here (Think of Apple Computers (AAPL) or Starbucks (SBUX)). Growth companies can be found in many different sectors, although such companies often have similar traits. A growth company usually has a unique product or service to offer which can fundamentally change how business is done. When found early enough in their growth cycles, these companies have the potential to return enormous profits to investors.

Value

Value plays usually are found in larger companies, although the strategies used to find them can be applied to smaller corporations as well. Looking for value stocks is similar to looking for values in a store: find a good product at a price below what you would normally expect to pay. These bargains are often found in the form of companies which have been unfairly beaten down through overselling. Finding value stocks usually involves using a discounted cash flow model (DCF) to find a company's intrinsic value. This is the form of investing advocated by Benjamin Graham, and popularized by Warren Buffett.

GARP

GARP, or Growth At Reasonable Price, is a combination of the above forms. As the name implies, the focus is finding growing companies trading at reasonable prices. Quick measures of this include the PEG ratio (Price to Earnings to Growth) and Forward P/E. Although not a specific style, GARP is utilized by many investors because of its flexibility. The average, diversified portfolio will have many GARP-type stocks in it.

Once you know your goals, the amount your going to invest, your relatively debt free and know your risk tolerance it's time to look at the market and start thinking about selecting stocks.

Getting Started: Learning the Market and Selecting Stocks

If you were going to spend several thousand dollars on a refrigerator or television, you would thoroughly research the market for those goods to find the product which best suited your needs. Investing is no different. Before buying into a company, you should be well-acquainted enough with it to give a short presentation. Knowing the basics of how a company operates, what it sells, how it makes money, how much money it makes, and what kind of growth the company is expected to experience are all crucial questions that any investor should be able to answer.

Developing a better understanding of the stock market is a long, but hopefully rewarding, process. Immediately investing in stocks with real money, however, is equivalent to taking a test without being introduced to the material. Formerly called "paper trading", beginning investors would normally spend several months tracking their stock picks without having real money on them.

Thanks to technology, you can now find sites that automate (for free) the process of tracking price changes for you on the internet. Simulated investing is a risk-free way of beginning to understand market fluctuations and the forces driving them. Examining these trends will payoff in the future, as an increased understanding of the stock market can only help you on your path to building wealth.

Once you become comfortable picking your own stocks, you can still continue to "paper trade" online, as it offers the opportunity to explore and experiment with other investing styles. Gordon Gekko, the famed villain in Wall Street played by Michael Douglas, said "Information is the most valuable commodity I know of". Ignoring for a moment that the movie ended with indictments for insider trading, the statement is true: you will not regret being an informed and intelligent investor.

The market is constantly changing, but by learning the ropes of investing you too can pull off a "One Up on Wall Street".