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According to the Bureau of Labor Statistics, as reported by Fundera, 20% of start-ups fold in the first year, 50% fail in five and 70% flame out in ten. Notably, CB Insights cites “not having the right team” as one of the top reasons for the demise of small businesses.
Partners who lack vision can be detrimental to operations even if the concept, cash flow and market conditions are perfect. On the other hand, the right team can help an owner navigate any challenge.
Here’s what to keep in mind when considering the people to build your business around and what to do when you’ve found them.
Find those who excel at your shortcomings
It’s not easy running a company with only one viewpoint to guide the ship. Oftentimes, small business owners are required to juggle multiple operational roles that could potentially lead to mismanagement or even downfall because important objectives fall through the cracks. Opportunity lies in determining your strengths and hiring for your challenges so you can focus on what drives you to achieve success.
Related: How to Let Go of Control and Hire an Expert
Take a deep dive
Once you’ve identified someone with the right skills and experience to complement yours, the hard part is over, right? Not necessarily. Now is the time to do your due diligence. Check to confirm everything that seems right about the candidate is actually true.
It’s a value-add for the person you’re considering to have different viewpoints, perspectives and skills than you possess. However, it’s critical for partners to share the same spirit and vision – even more so in smaller enterprises with modest-sized teams. Even if their skills check out and compensate for any areas where yours may lack, your overall ethics must align for the partnership to work.
If all of the boxes are checked, congratulations! Now, get everything in writing. Have a clear plan for day-to-day responsibilities, decision-making and resolving disputes while making a binding document. An operating agreement at the onset of any relationship ensures you are both protected.
Related: 10 Questions to Ask Before Committing to a Business Partner
Plan for disagreements
Not every good partner is right for every idea. No matter how compatible you and your team are in your business relationship, there will be times when you will disagree. It’s how you deal with those arguments that matter and it’s best to plan how you will resolve them before they even occur.
Begin with establishing a clear vision for the partnership and company that everyone agrees with. This will reduce the likelihood of off-track ideas coming to the table.
Understand the difference between acquiescing (lose-lose) and compromising (win-win). Once a decision is reached, everyone must be prepared to meet challenges as a unified team, regardless of the outcome. Good partnerships don’t allow room for “I told you so’s”. Unity is key.
Hire slow and fire fast
If you’re in a partnership that you know for certain is wrong, it’s better to rip the band-aid off sooner than later. Glaring issues in a partnership are unlikely to change, even if you’re successful. In fact, the conflicts will get worse over time.
Having the right team can be the essential component in keeping your company within the 30% of small businesses that make it 10 years and beyond.
Not every decision will be right, but as long as you treat perceived mistakes as lessons and pivot quickly, each experience will make you wiser.
Related: How to Break Up With Your Business Partner the Right Way