Most partnership problems are best avoided before the partnership is formed-even before you discuss it with a potential partner. The first thing to do is make sure you need a partner, says Olson. Even if you already have someone in mind, it's best to start with a clean sheet of paper. Keep your options open, and evaluate your business, yourself and your potential partner before making it official.
Start by making a list of the things you hope that partner will contribute, Olson advises. Then, consider whether you would be better off getting those things elsewhere. For instance, instead of taking on a financial partner, you might prefer additional outside financing.
If you decide a partner is worth taking on, Gage says you should next consider what kind of partner you will be. Make another list, this time of the things you'll bring to the partnership. This could include money, talents, contacts or other assets.
Next, ask yourself what you want from the partnership. Whether it's a salary, a share of the profits, the perquisites of position or anything else, be frank about what you hope to gain from joining forces to start a business, Gage says.
Now it's time to start looking for a partner-or, if you already have someone in mind, evaluating your candidate. One surprising bit of advice from experts and veteran entrepreneurs: The last place you should look is among your friends. "You want somebody who complements you," explains Fred Kiesner, entrepreneurship professor at Loyola Marymount University in Los Angeles. "Your friends are probably clones of you. You don't want a friend as a partner." The same goes for relatives, he adds.
One reason to rule out friends is that, if worse comes to worst and the business goes under, your friendship may suffer collateral damage. "When people say they're going into business with their best friends, I say they're going to have a best enemy one of these days," says Kiesner. "It's a very common thing that you end up hating each other."
When you add it up, the best source for partnership candidates is among the people you work with. Your best bets are colleagues, suppliers and customers whose business skills you know and respect, and whose personalities you can tolerate. Olson worked alongside his first partner in his last job and credits that experience to their initial success. "I'm not sure I would partner with anybody I hadn't worked with before," he says.
When considering candidates for your partner, look for people who complement you. Ideally, they'll bring assets you don't have and that will benefit the company. That may mean getting someone with financial and operations expertise to match your skills at marketing and product development, as Olson did.
Picking a complementary partner could also mean seeking someone with a personality that's different from yours. Darlene Ziebell, president of business management consulting firm Actoras Partners in Hoffman Estates, Illinois, partnered successfully with her co-founder for nearly a decade. "If my personality didn't work with a particular client, his did," says Ziebell, 50. "It pays to have different kinds of personalities."
If your potential partner passes all these checks, it's time for some background research, says Leslie Grossman, 49. She did just that when she started Women's Leadership Exchange-a New York City-based organizer of business conferences for fast-growth women-owned businesses-with two partners in 2001. Check out a partner by calling former employers or other references, just as you would with a candidate for a job, Grossman says. And be prepared to hear bad news. "Sometimes," she says, "partners might not have the expertise you think they have."