A partnership company will be more effective if they are created with detailed structure and agreements in place. If you start a new business with a mismatched or unhelpful partner or the proper agreements in place your business will not be around long.
Here are the basic steps you need to follow in you would like to launch a good business partnership. Experience has taught that these 5 items will provide the business partnership advantages to help your business thrive.
1. You must both be committed to the same goal. Specific business goals for your business. i.e. a 5 year plan for the business. All your goals should be aligned with those of your partners. If you are both on the same page you will be able to make good decisions, avoid arguments and improve the entire operation more efficiently. These goals should be you and your partners guide to all the important operations and management decisions. For example if the purpose of starting your business is to get annual sales to a certain amount and then sell it all you decisions will be geared toward that end game. But, if your partner is looking to create a long-term career for themselves in this business their decisions will be at odds with yours.
2. You must have an effective means to communicate with your partner honestly. Effective business partners are close. They don’t hesitate to communicate with each other in a frank, open manner. This simple action of regular communication will build trust and understanding within the partnership. Ideally you and your partner should have this relationship and work together in this manner before you go into business together.
3. It’s important for each of you to specialize. Business partners really work well together if they each have a different specialization within the business that each can manage. This is a vital structure for small businesses but know it requires implicit trust by both partners. This specialized approach will allow the business better utilization of resources overall. It will also help operational issues and provide increased flexibility.
4. You must offer support to each other. It’s easy to undermine your business partner with your employees with a small comment now and then. Obviously this should be avoided as it does not improve the business. Your business relationship with your partner should always be considered your most important business relationship. You should schedule catch up meetings regularly to keep in touch of current personal and business items.
5. The business partnership details must be documented. This should be item one of setting up the business partnership. Find an attorney to draft a partnership agreement that includes financial plans, management plans and any operational items for which the partners are responsible. Make sure that you include buy out agreements or other exit options that both partners have agreed to in order to sell or close the business.
If you have a good business now adding the right partner can take it to new heights. Take the time to prepare yourself and your new partner for doing business together and your partnership will be a successful one all parties.