Checklist For Successful Business Partnerships
Sometimes, having a business partner is just what the doctor ordered. You can delegate responsibilities to the partner who better enjoys or has more affinity for certain aspects of the business, and everyone is better for it. Business partners can also help take some of the financial strain off, especially if roles are carefully defined … and that leads us to the “yeah, but” of this conversation.
Nearly everyone in business knows someone who has been in a horrific business partnership. Maybe you’ve actually been that person, and you had to learn some of what we’re going to talk about in this article the hard way. You’ve sworn off partnerships as a result, and most folks don’t blame you. But, given the right protections and in the right circumstances, a partnership can be an amazing advantage.
Right out of the gate you need to build yourself a safety net.
You need to be willing and able to walk away. There is very little worse that being stuck in a partnership that is frustrating everyone and hurting the business, but it happens all the time. You start with great hopes and end up too far involved to easily extricate yourself when things go south. Never leave yourself without a legitimate “out.”
Get with your partner and compare notes.
Do they have compatible and complementary priorities and goals? Will working with them make both of you better? If not, move on. No harm, no foul. Remember, the only reason to partner up is if the sum of the parts is legitimately greater than the whole.
Set the rules of engagement.
No matter how congenial and single-minded the partnership starts off, you will eventually have conflict. Things will Need to be Said. Set the rules for these engagements early – when everyone is in a great mood – and commit to stick to them. Learn to argue fair, with a focus on resolution, not just an airing of grievances.
Focus on business, but don’t forget to have fun.
Business relationships need to be nurtured. Just being “in the office” together won’t cut it. In that scenario, each of you has basically hired an employee to co-manage. That’s a different dynamic, and, even if you never talk about it, that will negatively influence the partnership.
Date your potential partner before you marry them.
Now, I don’t mean literally, and I won’t put a specific timetable on this, but you need to know – I mean really know – your prospective partner before you put ink to paper and combine resources.
Finally, put everything – yes, everything – in writing.
Bring in a business attorney that is not formally or informally connected to either of you. Lay it all out there, and, with their help, put everything in writing. Who will do what, when it will be done, how it will be done, how compensation will work, how conflict will be resolved, and how dissolution, if necessary, will be conducted. Once again, do not make any kind of handshake agreement on any of this stuff. One thing I can absolutely guarantee: things one or both people think are “understood” are definitely not “understood” in the way they think they are. The purpose of these contracts is to have shared definitions, delineations, and understanding.
So, what do you think? Have you been involved in a partnership with any of these protections in place? What other ideas do you think could make a partnership a better option for business?