Many entrepreneurs like to form partnerships when starting or growing their business. This is, in fact, a good way to go when it is done correctly. Interestingly, many entrepreneurs don’t know as much as the background of their partners, their business ideals or their vision for the said business. We have put together, nine easy tips to create the right partnership for your business.
- KNOW YOUR PARTNER PERSONALLY: It’s not enough to know your prospective partner on a professional level; you also need to know them on a personal one. How do they cope under pressure? How do they handle work stress? Are they cooperative? How do they get along socially? And very importantly, how much personal life baggage do they possess? All these are essential to the state of your business.
- TRUST: You want to build a business with a partner you can trust. This is a very key factor to the growth of your business in the sense that your partner is your main support system as far as that business goes. It is important to have that belief in each other’s abilities and relying on them going forward.
- DISCUSS POTENTIAL ISSUES: Raise and discuss potential issues before they become issues. This is business and anything can happen at any time. It will be in your best interest to discuss worse-case scenarios. This is important because it prepares you and your partner for the unknown future and helps you correct any inconsistencies in each other’s positions on the probable issues. It will also help in reducing conflict possibilities. However, if your partner is unwilling to have such discussion, you have the wrong partner.
- BE HONEST WITH EACH OTHER: The last thing you want to do is worry about hurting each other’s feelings when it comes to hashing out disagreements. For your partnership to work, you need not be afraid to openly share your opinion as bottling things up will do more harm than good to your business and eventually, your personal relationship.
- DEFINE ROLES: For start-ups, defining partnership roles may not be an essential need as things may still be tedious and muddled up, but as you go, it will be better to have a clear definition of who is in charge of what. This way, there won’t be unnecessary conflict and employees are clear on who to report to on certain business matters.
- SHARE SIMILAR VALUES: Don’t move on with a partnership until you’re certain your partner is in tune with your goals, dreams and vision for your business. There should be an alignment in thoughts of how you see the business progressing as well as aligned core values and work ethic.
- CHOOSE A PARTNER WITH COMPLEMENTARY SKILLS: It’s best to have a partner whose working competences differ from yours in a way that it balances the job when put together with yours. This is what we mean by choosing a partner with complementary skills. When you have a partner whose skill set are similar to yours, then such person may be considered surplus to requirement. Having a partner with complementary skills will help the business thrive better and ultimately aid in seeing the bigger picture for your business.
- SELECT THE RIGHT BUSINESS STRUCTURE: You can organise a partnership as a general partnership, limited partnership or limited liability partnership. However, you can also organise it as a C corporation or S corporation. Each form of business has its advantages and disadvantages in terms of liability, taxes and continuity. Talk to an attorney or other experienced advisers to help determine which form of business is right for you and your partner.
- PUT IT IN BLACK AND WHITE: We decided to put this last because we believe it is the most important going into a business partnership. You may be going into a partnership with even your best friend from childhood, it’s very important to lay down the terms of partnership, decision making pattern, disputes resolve and all other relevant information in a legal document. Thinking through all the things that could go wrong and how you’ll deal with them makes everything easier.
We believe with these tips, your intended or already existing partnership will sail your business in the right direction and cause you to smash your entrepreneurial goals one after the other! If you have any comments or contributions, do share your thoughts in the comments section, we’ll be delighted to hear from you.