When starting a business partnership, it is important that you have an effective conversation with potential partners. A good relationship is based on creating value for both sides. You need to make sure that your goals and objectives are clear to them. If you fail to do so, you are likely to face many misunderstandings in the future. One of the main reasons why business partnerships fail is because both parties have misunderstandings in who benefits from the relationship and the direction it will go. Here are several tips to apply to help add value to your business partnerships.
Clearly Define the Role and Responsibilities of Each Partner
Defining each partner’s role and duties is immensely helpful in reducing the chances of future disagreements. As each partner has control of his or her domain, there would be no room for disagreements. Try not to blur the line between your responsibilities and avoid any potential conflicts regarding roles in the future.
Put Your Vision in Writing
No matter if it is your childhood friend that you are starting your business partnership with, make sure to draw up legal documents about every aspect of the partnership. This written document includes the business structure, capital contribution to it, and how decisions are to be made. In addition, discuss what is to be done when one of the partners decides to leave the business. Make sure to think through everything that can potentially affect your partnership.
Re-confirm Your Commitment to Honesty
For your business partnership to work in the long-term, both of you should feel great about being transparent with your insights and working through any differences that emerge. Honesty is a foundational aspect of any relationship, even outside of business. Hiding your interests and other agendas will only lead to bitterness and disdain, which can cause the relationship to deteriorate.
Track Records Cooperatively
One way in which a business relationship can collapse is when information is mismanaged. Whether you are tracking profits, marketing data, financial returns, costs, or other components of your operating plan, it can be valuable to do this with your partner. When both partners are seeing in real-time any significant changes in their data or metrics, they can work together in formulating strategies. By working closely with your partner to set goals and respond to challenges, the partnership benefits as a result.
Unless you lay the foundation for a lasting partnership, your business may be at risk of a dysfunctional relationship with your partner. It is important to outline future challenges together and maintain an honest disposition when communicating. By adopting these strategies into your partnership plan, you can engage in a partnership with more safeguards to protect both of your interests and your business.