By Steve Strauss
Often, the best businesses are those that are started by two people of different backgrounds and with different skills sets. You may be a marketing genius, but know nothing about finances, and you might have a friend who is financially literate, but knows nothing about business. Together, you may make a great team.
Martha Stewart has a woman she works with named Sharon Patrick, a steady woman who helps run the empire. Martha likes to compare Ms. Patrick to Jeep® – solid and dependable. Many entrepreneurs need their own Jeep®, yours just happens to be one who has money, that’s all.
Consider this real life example…
In 1930, Chester Carlson landed a job in the New York City patent offices of a small electronics company, where his job was to assemble patent applications. Patent applications are extremely long documents, and Carlson’s job of duplicating the drawings and specifications was boring and tedious. Frustrated by his day job, and already prone to inventing, Carlson decided that there must be a better way.
He began to study photography, the physics of light, paper treatment, and printing. His research paid off when he stumbled upon photoconductivity – the method in which light affects the electrical conductivity of materials, thereby allowing him to reproduce documents electronically. Hoping to find a corporate sponsor for his invention, or even someone to sell it to, Carlson then spent the next few years meeting with, and getting turned down by, the likes of GE, RCA, and IBM. He had no luck; he was a genius, but not a marketer.
The break Carlson had been hoping for came in 1947 when Joe Wilson, the president of a small photographic company called Haloid, and a marketing wiz, came to see the electronphotograhy machine he had read about. After seeing a demonstration, Wilson exclaimed, “Of course it’s got a million miles to go before it will be marketable. But when it does become marketable, we’ve got to be in the picture!”
Wilson and his company eventually pumped $100 million and 10 years into the invention before finally turning Carlson’s idea into a workable machine. Deciding that “electron photography” and “Haloid” weren’t snazzy enough names, the marketing wizard decided to rename the process and the company to – Xerox.
Business partners can take many forms. You may be able to find a “silent” partner who merely wants to invest in return for a share of the company, or you might find someone who is interested in becoming an active participant. To help you get you on the right track, take a look at this checklist:
- Networking is essential. Put the word out to your lawyer, accountant, and banker that you are looking for a business partner.
- Speak with friends, family, colleagues, and people where you worship. Word of mouth has found many a partner.
- Speak also with suppliers and distributors for possible leads.
- People in your line of work who have retired may be interested in being either a working or silent partner.
- Look online. Try businesspartners.net.
- Advertise. Most classifieds sections of most newspapers have a “capital needed” section. Look too under the “capital available” section.
When looking at potential partners, keep in mind that entrepreneurship is a risk. Your venture may not succeed, so be extra careful about partnering with friends and family members. Owing money to a close friend or family member after a business goes south is not a pleasant experience.
The important thing to remember when looking for a partner is that you will get the money you desire only if the partner gets what he or she wants. Does he want to be involved in day-to-day operations? If so, you better be sure that this is someone you can work with. Does she just want a return on her investment? Then you better have a solid financial plan. Ask them what they want and then give them what they want.
Steve Strauss is a senior small business columnist at USA TODAY and author of 15 books, including The Small Business Bible.