Define metrics, meet the potential partner in person, and then hire a lawyer to draft a formal agreement, experts suggest
I recently got ousted from an informal agreement with a business partner. I'm looking for a new business partner, but I don't have the funds to meet personally with all the candidates because many of them live outside my local area. Can remote business partnerships work? How can I explain my business idea to these candidates without disclosing too much information? —D.G., Montreal Remote partnerships often work surprisingly well and are more common than you might think. "Different partners bring varying sets of experiences from other ventures. Having partners representative of different business niches provides balance and will paint the enterprise's big picture," says Hank Moore, a corporate strategist and author of The Business Tree (Career Press, 2009). The key is to choose the right person from the start and develop a strong system for holding the partnership accountable using solid metrics, says Steve Nielsen, CEO of PartnerUp, an online networking community for entrepreneurs. Rather than starting from the candidates' resumes, make a list of the most important personality traits, experience requirements, skills, knowledge, and other characteristics you need in a business partner. Also write up a description of how you and your partner will divide responsibilities. Knowing what you require from a partner will help you narrow the possibilities quickly and systematically. "Once you narrow down to your top three candidates, I would strongly recommend meeting them in person. If you are looking for them to display a level of commitment to your partnership, you could consider asking them to fly out to meet you," Nielsen says. Provide an incentive by telling each of them that you are meeting with only two other candidates. "If they aren't able to make it to you, but you really like their skills, I would consider flying to them or meeting somewhere in the middle," Nielsen says. start with an "elevator pitch"
Once you have chosen a partner, make sure you draw up a partnership agreement. If you choose a partner based in the U.S. or another country, there may be complex tax and legal issues to be decided upon, so find a knowledgeable attorney to work with you. Incorporate your responsibility expectations and metrics into that agreement, then continually measure those metrics and specify the consequences in case they are not achieved. In terms of sharing information with potential partners without giving too much away, start with a generic "elevator pitch" that explains your industry niche without giving away too much. Once you get beyond that level, experienced entrepreneurs are familiar with confidentiality agreements and should not object to signing and honoring them. "You can divulge enough in confidence to a prospective partner to justify follow-up phone conversations," Moore says. "Do not rely upon e-mails to solidify a partnership." Since things did not work out well in your last venture, be sure to talk to a business attorney this time about both the new partnership and your former situation. You need to make sure there are no contractual agreements still in force from the past, particularly if you're going into the same business or industry. "It is better to find this information out up front than to spend a lot of time building your business, only to find out that you had some sort of noncompete in your earlier partnership agreement," Nielsen says. Finally, remember that business-relationship building is an ongoing process, not a occasional action or a marketing gimmick. You'll need regular interaction—including face-to-face meetings—with your partner to solidify the partnership and plan for the future. You need to build "commitment to the concept and each other, where each partner realizes something of value," Moore says.