Things to consider before entering a business partnership
The road to starting a successful business may come with risks and multiple roles. More often than not, entrepreneurs find themselves going from 9-hour shifts to 24-hour shifts with no holidays or weekends off. Moreover, the burden of running a successful business can be considerable and sometimes playing a strategist, marketer, finance analyst and hr manager just doesn’t work out in the long run. Overworking and burdening yourself with tasks because there isn’t an appropriate individual to do them can result in a counter-intuitive business set-up.
Entrusting certain business job roles to a trusted partner can bring a great sense of relief and can ensure a higher rate of success, simply because you and your partner can split the load and pay attention to specific aspects of business. Moreover, the chance of burning out is also incredibly low. In this article, we explore some of the factors involved in selecting a partner that is most suited to you and your business.
1. Align expectations
A great partnership comes from an understanding that both partners are basically on the same page. Having accurate expectations that are clearly outlined in the responsibilities each of you carry, can make it easier, so no one feels overwhelmed with their tasks.
2. Share similar values and goals
Nothing is more crucial to a business’ success than having those in charge think similarly and share the same values of the firm. An honest conversation about what you feel about the company and its overarching ideas can help you and your partner understand if you share the same values or not. Most partner-related discord is caused by a lack of shared values and goals, so ascertaining this aspect before jumping into a potential long-term business relationship is the best way to ensure your business can remain successful.
3. A trial period
One of the best ways to understand whether you and your potential partner are suited for business management is a simple trial run. They say, actions speak louder than words, and this is applicable to business as well. The way someone works and manages their tasks is better experienced than verbally told. Creating a realistic idea about how your partner works is a great way to align expectations and see the value addition each partner brings in to the firm without committing to the partnership full-time.
4. Analyze each partner’s strengths and weaknesses
A good partnership is not characterized by how alike each partner is to the other, but rather how well they fit with each other. One partner’s weakness can be compensated for by the other’s strengths, and vice versa. This is why analyzing each partner’s inherent strengths and weaknesses can help both understand if the partnership is worth pursuing. Moreover, assignment of roles is also made easier if each partner knows what suits them best.
5. A written agreement
A partnership agreement is one of the most important contracts for a business. It outlines each partner’s responsibilities, roles, shares, and gives them a scope of their control over operations. There are cases where partners choose not to sign an explicit agreement, which then results in confusion and unwanted conflict that has a negative impact on the business. The contract serves as a written proof of what the partners have agreed upon, and is helpful in solving potential disputes as well as providing clarity in unexpected circumstances.
It might be difficult to understand what it takes to become a successful venture, especially when you are considering starting a business with a new partner. Contact our consultants at SPC Free Zone (800 SPC FZ) for a consultation about your opportunities and how you can find the perfect partner for your firm today!