What to consider before bringing on a business partner

Bringing on a business partner can be one of the most exciting and risky decisions you’ll ever make in business. The right partner can bring skills, capital, and fresh energy to help you grow faster. The wrong one can lead to conflict, lost momentum, or even legal battles. Before you shake hands or sign anything, it’s crucial to step back and evaluate whether a partnership truly serves your goals and if so, how to make it work from the start.

Shared vision, values, and goals

A good business partnership starts with alignment, not just on what the business is, but where it's going and how you plan to get there.

Actions:

· Have open conversations about your long-term vision for the business (growth, exit, size).

· Discuss your values and what matters most when it comes to work style, communication, and priorities.

· Set clear goals for what you want to achieve in 6 months, 1 year, and 5 years.

· Identify any deal-breakers or red flags upfront.

· Make sure you're on the same page around time commitment, roles, and expectations.

Schedule a dedicated strategy session with your potential partner to explore your goals and values. Document where you align and where you don’t.

Skills and strengths

The best partners bring something different, but compatible to the table. You want to fill gaps, not duplicate efforts.

Actions:

· List your key strengths and weaknesses, then do the same for your potential partner.

· Consider how your roles would divide, who focuses on operations, sales, or finance.

· Avoid partnering just because you get along, there should be real business value in the pairing.

· Check for overlap or imbalance in areas like decision-making or leadership style.

· Think about how you'll handle disagreements, complementary doesn’t always mean agreeing.

Create a shared roles and responsibilities chart. If either person struggles to define their unique contribution, revisit whether the partnership makes strategic sense.

Legal and financial structure

It’s essential to structure the partnership correctly, don’t rely on handshakes or verbal agreements.

Actions:

· Decide whether you're forming a partnership, company, or joint venture as each has legal and tax implications.

· Draft a partnership or shareholder agreement that covers ownership, decision-making, dispute resolution, exit terms, and profit share.

· Agree on how you’ll fund the business, either cash, loans, equipment, or sweat equity.

· Clarify what happens if one partner wants to leave, underperforms, or passes away.

· Get legal and accounting advice before signing anything.

Engage a lawyer to draft or review a formal agreement. Make sure it includes an exit strategy and clearly outlines each person’s responsibilities and entitlements.

Communication and conflict management

Even strong partnerships hit bumps. How you handle disagreements can make or break the relationship and the business.

Actions:

· Set up regular check-ins (weekly or monthly) to review performance, discuss concerns, and keep aligned.

· Agree on a decision-making process, decide who has the final say and in what situations.

· Create a clear process for resolving disputes, look at mediation, voting, or external arbitration.

· Be honest about your communication style and tolerance for conflict.

· Discuss personal boundaries (e.g. family time, availability, outside interests).

Before finalising the partnership, have a candid discussion about how you’ll handle tough conversations. Role-play a few scenarios together to test your dynamic.

Cultural fit and commitment

A potential partner might bring the right skills, but it’s just as important that they align with your values, work ethic, and long-term commitment. A strong cultural fit helps build trust, ensures smoother collaboration, and supports the shared vision for your business.

Actions:

· Assess whether they’re truly ready to commit time, energy, and (if required) money.

· Look at how they’ve handled stress or setbacks in past ventures or roles.

· Clarify whether this is a full-time commitment or one of several projects.

· Talk through lifestyle needs, discuss whether your expectations around flexibility, holidays, and workloads are similar.

· Be honest about what level of pressure or growth pace you both want.

Spend a few weeks working together on a trial basis before formalising the partnership. Use this time to evaluate chemistry, capability, and commitment.

Final thoughts

Trust, transparency, and planning are the cornerstones of any successful partnership. Don't rush into it just because it feels right in the moment. Do the due diligence, have the hard conversations early, and get everything in writing. If you get it right, you’ll not only protect your business, but you’ll also build something far greater than you could on your own.

If you’d like expert guidance on structuring partnerships and safeguarding your interests, our Wellington business advisory team is here to help. Let’s work together to create a solid foundation for your next big move.

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