How do you find the perfect restaurant business partner?
I’m asked this question all the time by new entrepreneurs because it’s super important!
Throughout my last 10 years of mentoring different small business owners, I found that 99% of them have failed because they chose the wrong partner.
You don’t want to lose a friend because of business, which is why it’s crucial for you to understand what to look for in the perfect partner for your food and beverage restaurant.
1. Have An Aligned Vision
The number one priority in finding the right partner for your food and beverage restaurant is vision.
You’ve got to make sure that your vision is aligned with theirs. Everyone has to be on the same page.
If you want to build a 100-shop franchise, then you need to make sure that the partners you bring on board have the same vision as well. If your partner is just looking to open a mom-and-pop shop that basically runs itself – it’s not going to work.
These are very different visions that require different risks, skillsets, stress, and workload.
If your partner wants a business that requires a minimal amount of work, they’re thinking in terms of an investor.
Your goal should be to find a someone that can bring strategic value to your food and beverage concept to help realize your vision of a 100-shop chain.
There may still be conflict about how you want to achieve your vision, but because of the fact that you both want to reach the same place you will always be able to find the right solution.
At the end of the day, both of you want the same thing. Your visions are aligned.
For example, when I was starting my ice cream shop, I brought on my friend Brian and told him right from the beginning what he was signing up for. This was the reason why we’ve been able to maintain a great relationship over the past 5 years.
2. Aligned Values
The second thing to think about and consider when choosing the right partner is their values.
We hear about values a lot, but what are they really?
Your values are the things you believe are important in the way you live and work.
At the end of the day, what are your priorities? How do you work? Do you value relationships? Do you value efficiency? Do you value integrity? Do you value communications?
If the things you value are not shared, the way you achieve your vision may be different and create tension.
For example, If you’re a person that values punctuality and efficient time management, but your partner is a little bit more flexible, it’s going to push your buttons. There’s going to be clash because your values don’t align.
At my ice cream shop, we established four different values from the start:
Communication is something that I highly value. I love it when people communicate with me regarding whether they can do something, or whether they cannot do something. I want to be in the loop.
This is why I asked Brian if he valued communication right away. As a result, we now have a consensus on the importance of communication in the company.
If you truly want someone to update you all the time because that’s how you operate and think a successful business should be run, then declare that. Tell your partners this is what you want and ask them what they value.
If they think constant communication is inefficient, then right then and there you know there will be conflict. They’re not going to communicate with you.
So if your values of communication don’t align, you should really reconsider if this person is a good partner for you. The way you communicate and approach your vision can make or break your partnership.
I’m handling multiple businesses with multiple teams at the same time. If someone that I work with does not have high integrity, then it’s going to be a big problem.
They’ll slack off when I leave work, go watch football, or drive off and say that they’re visiting our store for no apparent reason. They’re just slacking. They’re making excuses.
At the end of the day, if integrity is not something they value, there’s nothing you can do. This is why you must establish it from the get go.
Brian and I are great partners because I know that he values integrity deep down at his core.
Empowerment is giving the confidence to other people to be able to perform a certain task, trusting that they have the ability to do so.
I really promote this because if you’re operating a big team without empowerment, without inspiration or giving rise to opportunities for people to become leaders, it’s very, very difficult for you to achieve anything.
For 5 Key Traits to look for when hiring employees check out this article here.
This is a mentality that I have deeply ingrained in me. Brian also has this GSD mentality.
With business there’s never one right way to do something. There’s no formula. When you have an objective, all you have to do is hit that objective.
I don’t like to hear any excuses. All I want is for them to be able to achieve that goal or task.
Brian and I work so well together because he was the same mentality. He’s not going to come and tell me, “The suppliers won’t allow us to make this modification.” He’s going to go find another supplier who will work with us, that will provide that feature we need before coming back to me. He knows how to GSD.
Imagine if Brian didn’t have these same four values. There would be a lot of conflict, and we wouldn’t focus on building our business.
You can see how much power and harmony it creates within a partnership when the values align.
3. Know What They Bring To The Table
You need to understand that just because they’re your best friend, family member, or someone that you trust a lot, it doesn’t mean they are qualified to become your restaurant business partner.
Always be strategic with the partners that you bring on board. Your friend is only meant to be your friend. They are not meant to be your restaurant business partner.
Although they may have the skillset, they might not be a suitable partner because they don’t bring any value to your specific operation.
For example, I brought on Tim for my ice cream shop for a specific reason. He is a supplier and a wholesaler of all the ingredients, which means that it’s guaranteed that we have the lowest cost of goods sold.
Secondly, for R&D, we’d have access to a lot more resources to find different equipment and product ideas because he is in the trade of wholesaling.
Thirdly, he has a warehouse and delivery system that we’re able to leverage off of when we’re working with our ice cream shop.
Similarly, you need to know exactly what you bring to the table so you can pitch yourself to others.
Brian brings dedication to the table. He’s very strong on operations and good at dealing with all the staff. I knew he would focus every bit of his time and energy into building 720 Sweets.
I bring to the table a high sense of business acumen and I’m strong with marketing, because I’m able to understand what people want.
We made a great strategic team because we both brought different skillsets to the table.
The biggest mistake that people make is bringing others onto the team just because of money. Unfortunately, money alone doesn’t solve problems. You need to find partners that offer more:
What do they bring to the table? What value do they add that would make this project super successful?
We chose the right partners, we had the right support, and we had the right talent to build the business. That’s why we were able to expand internationally within a span of only four years.
When you’re trying to find a partner for your food and beverage business, make sure you understand what they bring to the table.
4. Have Clear Identifiable Roles
The final thing you need to determine when bringing on a food & beverage business partner is their role.
What are they going to be doing on a daily basis, on a weekly basis, on a monthly basis?
You need to make sure to identify this so your business partner knows what they are signing up for from the beginning.
Are they good at operations? Are they good at marketing? Are they going to be doing finance? Are they doing logistics? We need to be able to identify all the operations and all the arms of your business and who is responsible for what right from the beginning.
Make A Shareholder Agreement
This is usually a 40+ page document that identifies everything that you and your partners are responsible for.
Like a prenup for business.
Let’s say your partners are not really carrying their weight. You can confidently determine who is at fault because of this shareholder agreement.
Not identifying individual responsibilities creates a lot of conflict and unnecessary burdens in a partnership and the business. There will be many disagreements because the roles are not identified clearly.
Include an Exit Strategy
You need to determine an exit strategy. If your partner wants to sell their shares, how can they do that? If they’re not doing their job, how can you buy them out?
Say you’re in a situation where you find a partner and they’re super excited for the first two months but then they fall off track. Now you’re trying to incentivize them and inspire them but nothing works: What are you going to do?
Are you still going to build that business for them? Or are you going to have an option to buy them out? This is why shareholder agreements are so important because they clearly identifies the terms of the partnership and what happens if they’re breached.
A lot of people don’t have shareholders agreements. Who would ever think about getting a divorce during their honeymoon? No one does that. This is the same thing.
Yet so many people come to a point where they do not align with each other’s visions and values. If the best option is to part ways, it’s very difficult to do so without a shareholder’s agreement.
To prevent this from happening, have all the ugly and difficult conversations right at the beginning and make the agreement. After that’s done, all the focus can be on building the business and moving it forward.
So there you go. The four things you must identify to choose the right partner for your food and beverage business.
Now how are you going to take action?
If you don’t have these conversations with your business partner, they might end up taking advantage of you, and that’s the last thing we want.
The key is to have these conversations with them as early as possible to avoid the conflict in the future.
If you’re in the beginning stages of starting your dream restaurant, cafe or food business and want to do your best to avoid costly mistakes or waste a ton of money…my free masterclass will give you an in-depth look at my ACE formula – the same formula that I used to build my 7 store ice cream chain and how my students were able to get more clarity in their food business. Sign up for the masterclass here.