Partnerships are a double sided coin; they’re wonderful when they run smoothly and downright ugly when things go amiss. Here are some obvious and not-so-obvious things to consider when establishing a partnership.
Do you and your partner(s) have the same vision? Do you see eye-to-eye with your partner on where the company is headed? What values are important to you? To your partner(s)?
The adage, “the total is greater than the sum of its individual parts” is especially true for a partnership. Do you and your partner(s) have complementary skills? For example, does your strength in production work well with your partner’s great sales experiences?
Fear not – partnerships can also work if owners have the same strengths. However, if your strengths and weaknesses are the same then you should assign leads in each areas of the business (i.e. finance, marketing, customer service etc.) to avoid over- and –under –focusing on specific goals. It doesn’t mean that one person is doing all the work: it simply means that the work gets done right. Someone has to monitor the cash flow – even, and especially, if no one likes doing it.
Do you and your partner(s) have the same to lose?
In other words, each partner needs to be invested and committed in the same way (but not necessarily do the same tasks). What happens if you go into business with someone who looks at this as a hobby and you don’t? Or they may have limited amount of time to commit and you are doing this with all your heart and soul? What happens when things get tough (and they will)? Will they bail?
Your partner may be your best friend, a colleague, or a family member and these have emotional, as well as, business implications. Partnerships need a written agreement. Ideally, but not mandatory, have a lawyer look at the agreement. What’s important is that you have something on paper that all partners can agree to. A good tip worth noting is to make sure to include an exit clause (i.e. what will happen in the worst case scenario). Because once major disagreements surface, it’s simply too late to hammer out solutions if there’s nothing on paper in the first place.
If you have a good relationship with your partner(s), then this will only solidify it. If on the other hand, your partner(s) is not sure or is stalling to put expectations on paper, then how serious are they?
When partnerships thrive, they are a marvel to see in action. The bond that develops successfully is one that is based on mutual respect, sharing, caring and playing off each other’s strengths.
Make sure your partnership gets off to a good start.
Dominik Loncar, Futurpreneur Entrepreneur-in-Residence, email@example.com