Admitting a new partner is an important step in any company. Evaluating some objective criteria is essential before considering this entry, to prevent a move that should add something to the business from becoming an object of dispute, converging the partners’ energy on internal discussions rather than on the growth of the company.
To help with this assessment considering Brazilian companies profiles, we bring here important points for reflection on the subject, both for those who are accepting a new partner and for those who intend to enter a company.
1. Defining the Partner’s Role: determining what the role of the new partner will be and the purpose of joining the company is, without a doubt, the first step, because from this it will be possible to establish limits, responsibilities and obligations for this new role. The reason for admission may have different motives, such as the need for a capital injection; the entry of some asset – movable or immovable; the need to add some expertise/know-how to the company; a new workforce; or even the entry of a new client portfolio.
2. Alignment of Interests: identifying partners who have convergent plans for the business is another challenge. Alignment of interests, objectives and culture is essential. One of the reasons why partnerships are dissolved is precisely because partners have difficulty in conducting the business towards the same goals, or in maintaining a relationship with each other. It is important to remember that partners will have the challenge of always conveying a sense of unity to the market and, especially, to their employees. Therefore, it is necessary to identify which are the essential values and attributes that I, as a partner/founder, value and then seek them in someone with whom I will partner.
3. Sharing Information and Transparency: the partner/founder needs to understand that he/she must respect, listen to and, often, follow the guidance of another person for a business that he/she had previously run alone – or with other partners. Therefore, when a new partner joins, there will often be a decentralization or sharing of control, which everyone must be willing to do to make it work. It is essential that a company always operates with the highest level of transparency, especially when it admits investing partners, who will not be involved in the day-to-day operations. Being willing to share strategies and their results – positive or negative – and thus being open to criticism is essential.
4. Clear Rules for the Partnership: establishing the rules for the partnership is one of the points that generates the most conflict when a partner joins, which helps to identify the partner’s profile and the possibility of success of this partnership. Drafting a clear, robust Partnership Agreement that addresses the roles of each partner in a personalized manner, establishing the partnership’s objectives, the position and function that each partner will occupy and their obligations, allows for cultural alignment from day one. With this care, it will be much easier to demand certain behaviors from the partner in the future, aligning expectations from the beginning for total transparency in the relationship.
The challenge of welcoming a partner or forming a partnership is enormous. And that is precisely why the development of a decision like this must be made through the analysis of objective criteria, aiming at the business that is intended to be developed. Here we highlight initial steps that need to be observed, and that may evolve in different ways, according to the conduct of each partner entry process.
