Business partnership… how do succeed with it?
For a new business venture to succeed, what is more important than having a great business idea? It’s finding the right business partner!
It is unfortunate to hear stories of founding teams with an amazing business idea that fell apart because they didn’t connect on a personal level.
One of the pleasures of starting a business is choosing whom you are going to work with. If you are planning to start a business with a family member, close friend, spouse, or coworker, do not assume that the business will be as smooth sailing as your relationship. A business partnership can run into rough waters just like a marriage.
Does that mean building a successful partnership is impossible? Not when you stay on course. Perhaps with these tips, you can succeed:
Share the Same Values
You can’t build a successful partnership if you and your partner don’t share the same dreams, vision, and goals for the business.
If they envision a full-time business and you want a part-time business because you want to spend more time with your family, then your goals differ.
A business can only succeed if you share the same work ethics and core values.
Pick a Partner with Complementary Skills
You and your business partner with different strengths mean your startup now has double power. A tech expert would partner well with a person with sales, marketing, and peoples skills.
So, both partners can use their skills and do what they are good at to build the business.
Make Sure You Have a Track Record
Succeeding as business partners doesn’t mandate you two for having a history of working together. However, it’s important that you have a track record of similar challenges. If you have achieved common goals despite the conflicts and challenges and thrived, you have a chance.
Choose the Right Business Structure
You might be familiar with types of business partnerships out there – general, limited, limited liability, and corporation. Ensure you understand all these and know the pros and cons before deciding which business structure will be right for you.
For advice, talk to an advisor or an attorney to determine which type of business partnership will be right for your business.
Set the Right Expectations
It’s important to set clear expectations and must have a deep understanding of what makes the other person happy. You need to have multiple conversations with your partner before entering an agreement. Each one of you should know why you are doing this. What are you trying to achieve and what scares you most.
Have a deep understanding of your partner’s motivations, goals, and hesitations to determine if they are really the right match. Once you are comfortable, you can now pull the trigger.
Put Everything in Writing
No matter how close you are to the person you are starting a business with, always draft legal documents about the business structure, capital contributions, how to make decisions, resolve disputes, and what happens if a partner wants to leave.
In other words, think of everything that could go wrong and come up with a solution to every situation so that you are prepared when the time comes.
The most important secret that will keep your partnership from failing is being honest with each other.
Both of you must be comfortable in sharing your opinions openly and resolve the disagreements amicably. Never sweep your concerns under the rug otherwise it will build feelings of resentment which can eventually destroy the partnership and then the business.
Open about your fear and become each other’s support system. If your partner asks for a fifty, give them your sixty. It’s much more than money, you know.
Embrace Each Other’s Working Styles
Your partner’s working style likely differs from yours. To make this business partnership work, you must respect these differences.
You do what you are good at and let them do what they are good at.
Keep Company Growth a Mutual Goal
Most problems can be solved if you never give up on the growth mindset. Apart from your revenue must be spent on growth. Invest in the tools and support that you and your staff need to grow.
While you do that, don’t give up on the desire to keep your partnership happy. Two partners together can eliminate the isolation entrepreneurship normally brings. The value of your business will hence increase beyond what each of you could have achieved individually.
Have the Hard Talks about Money
When starting a new venture, it’s tempting to skip the tough conversations about money. Some at this point, many believe it is counterproductive talk about money. Some even doge the whole thing and say they will split the equity by 50- 50. But things aren’t that simple, my friend.
In fact, ignoring everything about money could be a recipe for disaster. As mentioned earlier, have an open conversation. Handle everything fairly and make sure you are on the same page.
Be Mutually Accountable
In most partnerships, the individuals are so excited about doing business together that they forget about the importance of accountability.
It’s best to have an upfront discussion about accountability and the consequences if the goals aren’t met.
Decide Who Is Going To Be the Leader
It’s imperative to be clear beforehand about who the leader is. In most partnerships, there is usually one visionary leader and the other one is an execution expert.
When partners disagree on something, there should be some recognition that one founder should step forward to be the tiebreaker.
Be Protective of Each Other
Partnerships thrive when the members feel they are protected. Partners need to be reassured that they are in an environment that doesn’t fail them. If there is some insecurity, it must be addressed openly to put proper changes in place.
Decide How to Fill Other Positions
The decisions about whom to hire for the early positions are going to play a critical role in laying your company’s foundation.
Sometimes, one partner is inclined towards employing people he knows such as family members. If you disagree with this approach, make sure you communicate it.
Also, will the hiring decisions be made by the consultation of all board of directors? Initially, partners tend to neglect these things, but these decisions can result in a rift over the years. It’s better to set the right terms, to begin with for avoiding future conflicts.
Keep a Room for Development
When a business partnership is formed, you are not just combining resources but creating new assets. It’s imperative to be open and flexible about expanding the features of your products. In a tech partnership, adaptability is inevitable since customer needs and technology keep on revolving.
Your company must have space for launching new products, novel features and accept new forms of customer engagement. In short, a good partnership must have room to change and adapt as time progresses.
Set Up Balanced Rewards
Often, partnerships dissolve over time because one party was benefiting more than the other. If a party isn’t benefiting or isn’t being rewarded fairly, eventually, they will want to pull out.
The key to making a partnership work is that both parties must be given balanced rewards, which should be decided beforehand.
The quickest way of destroying a partnership is to remove trust from the narrative. For building trust, you must deliver your commitments consistently and communicate your intentions. With constant communication and sharing your opinions, you can build trust.
Never start a partnership with someone if you don’t trust them.
Keep on Reviewing and Learning
Don’t forget the importance of reviewing the partnership and the progress of the relationship. Identify the problems and learn from your mistakes. Apart from this, acknowledge the achievements and celebrate. This is a great way of refueling the partnership.
No relationship is perfect. It has its highs and lows. So, your business partnership isn’t going to be perfect. Conflicts will arise and you may make some mistakes. But to react immediately and take the right steps to turn things around so that you may recover faster.
Keep on Admiring Each Other
Admiration is important for building strong relationships. Keep in mind you don’t have to approve everything your partner does for admiring them. Just point out what they are good at.
People who are able to figure out what their partner is doing right can have a stronger relationship whether it’s in life or business. So a little appreciation can come a long way.
Have a Plan for Happily Ever After
Only a few partnerships last forever. Fewer founders are able to navigate the transition from a small venture to a big enterprise successfully.
No matter how good your relationship with the person you are planning to start a business partnership with, the ship can sink if you are not careful.
Take the help of the gems shared above to convert your partnership into a success. Review and vote on things together before moving forward. Enjoy the teamwork that this partnership brings and hope for the best.
For more business tips and insights, visit Stealth Agents.