5 Golden Rules for a Strong Business Partnership
Just one great partnership with the right person can have an incredible impact on your business success – Janine Ogg and Jo Foster
Someone has rightly said – business partnerships are a little bit like marriages. Creating a perfect partnership demands - understanding, effort and desire to make it work by all the partners involved. Setting up a successful business partnership is definitely an uphill task. However, if done successfully it can lead to some of the most flourishing business ventures in the world. Warner Bros, Microsoft, Apple Inc, Google, and Twitter are some of the monumental examples before the world that evolved out of a concrete business partnership.
Let us learn the recipe of a fruitful business partnership.
Define job roles for each partner
Just like your employees, the roles and responsibilities should be divided between business partners. Most likely, you and your business partners have a different set of skills and specialties. It is advisable to have written job roles, duties, rules and titles for each partner, rather than working under false assumptions. Clarity in job roles can save you unnecessary frustration and disappointment. Once it is done, be accountable for your roles, each other and to the business.
Exit strategy before you set sail
Ensure an exit plan before you say ‘I Do’ to your business partner. Ending your business partnership is the last thing you would think about before embarking on the journey of partnership. It is like thinking about divorce on your wedding day. But an exit strategy can act as a lifeguard when your business is about to sink. A sound business exit strategy includes many elements – legal points regarding the division of the business assets in case your business partnership breaks or one of the business partners meets death. For example, partnership insurance or small business insurance plan can protect the deceased partner’s shares in the company and thus saves company’s future. Similarly, Key Man insurance plan manage the risks and ensures that the company has sufficient funds to keep the business going in case of unfortunate demise of a business partner.
Ideally, you will have a partnership agreement before the foundation of a relationship. Outline the dissolution plan in the agreement, including timeline for the entire process of split-up, business insurance, payments made to tax agencies or attorneys, documents required for filing tax returns, list of tasks that need completion, and so on. Have a personal conversation with each other to discuss all these as well as factors that could possibly end of alliance and where to draw the line.
Release the frustration early
The ultimate test of a relationship is to disagree but to hold hands. – Alexandra Penney
Disagreements are bound to occur in any type of partnership. No matter how much you try to avoid, there will be issues, conflicts, disputes and impossible requests. It is important not to let the bad feelings build and multiply over time. The key to a good relationship is to let other parties share the complaint without being defensive. Make it an unofficial rule to reach out to each other when something needs to be addressed. No matter how complex a disagreement is, with good understanding, patience and strong communication, it can be resolved.
The best way is to nip an issue in the bud which can be done through regular, scheduled face-to-face meeting, at least once a month. It is always best to propose a plan for the changes you would want to see for a positive result. Give everyone time to respond to and agree before you implement any of the changes.
Utilize the strengths of each partner
No matter how big or small our business endeavor is, your ultimate goal would be to grow your business. Partners join forces for multiple reasons, and amidst all these, it is important to focus on the strengths of each individual. You and your business partner must be aware of each other’s strengths. Identify the underlying strengths and bring them out to make a big difference. Doing so adds to energy, zeal, and motivation against the odds of long-term success.
Support your partner’s limitations
The foundation of a business partnership often lays in the fact that partners complement each other. Sometimes it is lack of connection, capital or skills that make two or more business partners work together and satisfy each other’s limitations. However, there might be some areas left where none of the partners has either interest or expertise. Over time, these factors can make your business sink. Limitation of business partners can stretch to several domains, like strategy planning, product development, sales and marketing, financial management and administration and so on. Rather than driving yourselves to a dispute, point out the areas that are creating issues for you. Plan them to manage then through extra support so that they don’t get out of hand.
You might think that a successful business partnership is easier said than done, but with supportive relationships, efforts, and clear rules, you and your partners can build a large, strongly-founded business empire.
Coming together is a beginning, keeping together is progress, working together is success. – Henry Ford
AN AUG 41/18