How to choose the right business partners

By Pavlo Phitidis

Spats between shareholders can signal the beginning of your business’ end, just as it seems to have been for Stuttafords. This week on The Money Show with Bruce Whitfield, we reflected upon the recent shareholder/board fights at Group 5 and shareholder fights between Cell C and their BEE shareholders CellSAf who within themselves are also reportedly fighting. I also had a week of it with 3 businesses that I met, all with shareholder and partner issues. We considered the best ways to ensure you find the right partners for your business, and what kind of opportunities present themselves in company conflict situations:

The best way to avoid internal squabbles is to ensure that you’re working with the right people. Here’s what you can do to make your business spat-proof:

Pick your partners

While the idea of building a business with your high school best friend sounds idyllic, the needs of a business relationship are vastly different to one first created on the sports field. Typically, in business, the first two or three partnerships you make are going to be learning experiences and, by that, I mean, they’ll need to be mistakes – you learn far more through error than you do through success. An ideal business partner will be someone who you have good chemistry with and respect. Respect is vital.

Growth businesses are seldom, if ever, built by one person alone. A business needs three capabilities to grow: a technically obsessed capability to oversees the technical side of your products and services; an entrepreneurial spirit, that brings marketing and relationships and administrative disciplines paying attention to the all-important paperwork that makes your business work, and ensures that it adheres to all necessary legal frameworks. If you go the partner route, be sure that between you, you bring these three capabilities to the table, in effect ensuring that one plus one equals three. Avoid a partner that brings exactly what you bring because when one plus one equals one, conflicts will emerge.

Talk, then walk

Truth is found in action, and that’s why you need to talk with your partner, before you walk a business journey with them. Before you sign a long-term contract with a new partner, start with a small project. That way, you’ll learn more about your individual strengths, weaknesses and, importantly, how each of you face a business challenge. 

Sign the contracts

The best business partnerships are based on clearly defined roles and a robust contract. Set out the rules of your partnership, and directly detail everyone’s roles within the business. No matter how great your partnership may be, it always needs a contract. 

Be clear on why you do business

You need a business partner who is, as they say in Thailand, “same-same, but different.” Your objectives for the business must be the same, but each of you approach problems from different angles.  

Conflict within a business – especially that of your competitors – can also be an opportunity. Here’s why: 

The best people leave

If you’re scouting for great talent, a rival company may have the people you’re looking for. In times of business uncertainty or conflict, the best people often leave, giving you the opportunity to make them part of your team. 

A fresh start

If your shareholders are in ceaseless conflict, it gives you an opportunity to take the next exit and go put your energy into something new. Alternatively, they can take an exit and you can sail your ship with a new crew. In both cases, there are opportunities but action is the key. Time runs out for us all and maintaining the status quo of conflict serves no person and will certainly erode what value is left in the business. 

Time to acquire a stake

When a shareholder takes the exit sign out of a business, you may be able to buy your way into owning a piece of that business, at a far cheaper rate than if the business was not experiencing a conflict situation. If you opt for this route, the likelihood that you get cooperation from both the exiting and remaining shareholder is high. The exiting wants out, fast, when that’s the decision he has taken. The remaining shareholder wants to get the business going once again with its progress having been stalled during the period of conflict. 

Reflection leads to reinvention

If shareholders or partners manage to resolve the internal conflict, it’s a great opportunity to reinvent, or transform, the business. A shakeup can give your business a whole new lease on life. It might also be a good time to get a 3rd party facilitator involved. Someone who understands business and specifically can moderate and add to the discussion as to where to take the business and how.

At Aurik, we’ll work with you and your partners to get this done. We will talk Asset of Value language only bringing you, your partners and the whole business onto a road of growth and wealth creation. That’s what we do best.

Tags: AoV Mindset, Shareholders, Acquisition Opportunities, People Problems

How to Build your Business & Capitalise on a Seemingly Negative Business Environment
The Money Show Building your Business

How to Build your Business & Capitalise on a Seemingly Negative Business Environment

The reality of a recession is sinking in, and it seems the echo chamber of negativity is overwhelming. South Africa’s business...

Read more

How to build a resilient business in a technical recession
Building your Business

How to build a resilient business in a technical recession

Our economy is in the midst of a technical recession and business owners are wondering how to weather this economic storm....

Read more

Marketing for Business Growth: Keeping your Customer Acquisition Cost in check
The Money Show Business Growth

Marketing for Business Growth: Keeping your Customer Acquisition Cost in check

You’re not alone. It’s becoming more and more difficult to generate leads, turn those into customers, and grow your revenue....

Read more

Product businesses in the industrial sector need to build differently to survive and thrive
Building your Business Business Growth

Product businesses in the industrial sector need to build differently to survive and thrive

Keeping water flowing through the kilometres of underground pipes keeps all players in water infrastructure awake at night,...

Read more

How to Build Your Business by recruiting the Right People to do the Right Thing at the Right Time.
The Money Show Building your Business

How to Build Your Business by recruiting the Right People to do the Right Thing at the Right Time.

As a small business owner, your biggest investment will be your staff. How you hire, who you hire, and when you hire, will...

Read more

Turning the talk of your Business Strategy into the Walk of Execution and Results
The Money Show Business Strategy

Turning the talk of your Business Strategy into the Walk of Execution and Results

In recent meetings with frustrated business owners, Pavlo Phitidis picked up on a significant trend – a high level of complaints...

Read more

Why, When and How to Sell your Business.
The Money Show Selling your business

Why, When and How to Sell your Business.

Every business only has two destinations: it closes, or you successfully sell it. Globally, however, 94.6% of all businesses...

Read more

How to build your business through delegation
The Money Show Business Growth

How to build your business through delegation

Your business journey most often begins with just you. Along the way, however, as you figure out how to build your business,...

Read more

Managing Business Growth – The Killers of Business Growth
The Money Show Business Growth

Managing Business Growth – The Killers of Business Growth

Ask any business owner what they’d like for their business, and they’ll say “Growth”. But managing business growth isn’t...

Read more

KVD: A fisherman’s tale
Building your Business Business Growth

KVD: A fisherman’s tale

American Kevin VanDam is one of the top-ranking bass fishermen in the world with two Major League Fishing Cups, four Bassmaster...

Read more

How to build your business: Break it to build it throughout the growth cycle
The Money Show Building your Business

How to build your business: Break it to build it throughout the growth cycle

You build your business within the context of your business environment. When your business environment changes more rapidly...

Read more

More small business growth insights from GrowCo
The Money Show Business Growth

More small business growth insights from GrowCo

On The Money Show with Bruce Whitfield, Pavlo Phitidis shared further small business growth insights, gleaned from attending...

Read more

Learning lessons from the GrowCo conference

Learning lessons from the GrowCo conference

GrowCo gives attendees the opportunity to learn from the best in the industry with more than 600 people attending – including...

Read more

Reflections on Small Business Growth from GrowCo
The Money Show Business Growth

Reflections on Small Business Growth from GrowCo

On The Money Show With Bruce Whitfield, Pavlo Phitidis shares what he learnt about small business growth, scale, competition,...

Read more

Characteristics of a business owner’s spouse can  be make or break
Asset of Value Business Development Family Business

Characteristics of a business owner’s spouse can be make or break

What’s it like to be the significant other or the spouse of a business owner? People generally believe that when you are...

Read more

Turning a sweet start into a smart start: Making money from honey with your start up business
Business Opportunities The Money Show Start Up

Turning a sweet start into a smart start: Making money from honey with your start up business

What happens when your small side business suddenly shows a whole bunch of potential? How do you turn a hobby into the startup...

Read more

Creating a Succession Plan for your Family Business
Succession Business Succession Succession planning

Creating a Succession Plan for your Family Business

The statistics are terrifying. A mere 28% of family businesses, across the globe, successfully move from founder to next...

Read more

How to break a bad deal and not break your business
The Money Show Business Exit Exit strategy

How to break a bad deal and not break your business

Britain broke market access with BREXIT, and Trump broke the Iran deal with just a tweet, but neither seemed to consider...

Read more

Strategies for Business Growth that Go Beyond a Blind Belief in Brand Value
The Money Show Business Strategy Strategic Planning

Strategies for Business Growth that Go Beyond a Blind Belief in Brand Value

No business is ‘too big to fail’. Blind idealism didn’t work out well for Kodak, and now another iconic brand is filing for...

Read more

Identifying and Preventing Burnout when You’re a Business Owner
The Money Show Growing business value Building your Business

Identifying and Preventing Burnout when You’re a Business Owner

Burnout creeps up on you like the Dementors of Harry Potter fame. You may not see it at first, but it slowly takes over and,...

Read more

Big Questions from Business Owners Like You
The Money Show Growing business value Growing Business Systems

Big Questions from Business Owners Like You

The Money Show with Bruce Whitfield, Pavlo Phitidis set out to answer some big questions from business owners, like you:

Read more

Small Business Financing: To Debt, or Not to Debt?
Business Opportunities The Money Show Business Growth

Small Business Financing: To Debt, or Not to Debt?

Finding the right small business financing solution for your growing business is critical. Is going into debt the right option...

Read more

How to Protect Your Margins & Grow Your Business in a Cost Inflationary Environment
The Money Show Accelerating Growth Business Growth

How to Protect Your Margins & Grow Your Business in a Cost Inflationary Environment

Everyone is beginning to feel the pressure of an increase in VAT, petrol levy, and other price increases. Rising costs will...

Read more

The Key Components of Collaboration
The Money Show Building your Business Business partnership

The Key Components of Collaboration

While we’ve been looking to fill 13 positions within our company, Pavlo has also been dealing with several international...

Read more