Building a good business partnership is like building any other relationship. There’s a lot of potential, but there are also risks. A good business partnership can be of great benefit to your business, giving you the chance to reach a broader customer base, or develop new services that you couldn’t develop alone.
So what can you do to give your business partnership the best chance of success from day one?
Make Sure You Agree Where it Counts
A shared vision and ethos are key to a successful business partnership. Yes you will have plenty of details to discuss, but you need to start with a firm bedrock of shared ambitions and values.
Partnering with someone who supports your vision will make your business partnership healthier in the long run. Shared values will help you to work together without constantly clashing over what matters in your partnership, and in business.
Discussing your goals for your partnership is also vital. Agreeing on specific goals early on will ensure you are both working towards the same end result.
Define Expectations and Responsibilities
As the article “Why Business Partnership Are So Difficult And What You Can Do About It” says, it’s important that each of you defines what you expect from the other. Clarification now can save a lot of problems down the road.
Each party should know what they will be responsible for, whether that’s marketing activities, generating leads, package design or keeping an eye on the finances.
Don’t assume anything. No matter what the size of your partner company, the background of your business partner, or their area of expertise, you need to sit down and talk about what each of you will do.
Take some time to hash out what both of you will be responsible for. Use this as the basis of your partnership agreement, which you should both agree on and sign before you commence working together.
As in any relationship, communication is key to a good business partnership. Start off on the right foot with clear expectations, and keep that momentum going with regularly scheduled check-ins.
You might need to meet once a week or so to start, but as your partnership develops you’ll settle into a routine that works for you both, perhaps once a month.
The important thing is to set aside time where you can update each other on any goals or progress, share ideas or insights, and deal with any problems or questions before they get any bigger.
Have the Money Talk
Money can become a contentious issue in any business partnership. Head-off potential problems by having the money talk early on.
Money can be difficult to discuss, but some honest number crunching now will prevent problems later. Be honest with each other about the financial commitment you are bringing to your partnership and the kind of remuneration you are hoping for.
The truth is that a 50/50 split of the profits won’t always be the best choice. If one of you is going to being putting in more hours, or taking a more authoritative role, it only stands to reason that they will feel entitled to a bigger cut of the profits.
Get profit splitting straight now, to avoid resentment and conflict later.
It’s also a good idea to discuss what you will do about money if one of you takes a bigger or smaller role in the future.
A good business partnership is good for both parties and can bring increased profits, a wider customer base, and a new and exciting direction for your business.
Get details and expectations down in black and white early on to give your partnership the greatest chance of success.
About the Author: Tristan Anwyn is an author who writes on a range of topics including social media, SEO that works, and how to build a strong business partnership.