A business partnership is often likened to a marriage: if the parents work well together as a team, the children flourish, or in this case, the business is more likely succeed. No matter how innovative your business idea may be, an ineffective partnership can cause serious issues in the operation of your business, and sometimes even lead to the complete downfall of your business if certain issues escalate. There are however a few factors which if considered beforehand can help foster a collaborative, productive business relationship. If you’re currently considering partnering up, here are a few things to ask yourself:
1. Are your objectives the same?
When starting a partnership, you both may want the business to be successful, but your definition of what a successful business entails may differ. Where you may be wanting to take a more steady long-term focused approach in growing, your partner may want more rapid growth. There are no right or wrong goals when it comes to running a business, it’s more about ensuring your objectives are somewhat aligned.
2. Do you trust them?
We spoke to Craig Saphin,who runs his own consulting business helping entrepreneurs increase their business sustainability and growth and this is what he had to say on the issue of trust…
“Trust takes time to earn and can vanish in an instant. If there is a lack of trust in a business relationship, act quickly to change the partnership or close the business and end the relationship. I recently worked for a client who had partnered with one of his friends, the best man at his wedding … However, within a few years, his partner had embezzled the business funds resulting in the business closure.”
However, trust is not a replacement for formally written contracts – no matter how much you trust your business partner, be sure to have all elements of your business formally devised into a contract.
3. Do your strengths complement each other?
You and your business partner shouldn’t be total opposites, but you also shouldn’t be the exact same person. Ideally, your partner should have different strengths that help fill in skill gaps you might have – if your strength is in the numbers and operational elements, then perhaps your business partner should be more on the creative side, or a people person who can focus on business development. Ensuring you have strengths that complement each other can also help you ensure you can divide up your tasks accordingly, which brings us to our next point…
4. How will you divide workload?
The ‘who does what’ element is also something that should be ironed out before you open your doors. Once this has been established, it’s important for you both to be respectful of the lines of responsibility. However, this shouldn’t stop you from collaborating on each other’s areas of expertise either, it’s about creating a balance where you both have the opportunity to have your voices heard.
5. Do you have an exit strategy?
According to Stephen Sandor, owner of Inspiring Business, the perfect time to discuss how you may exit the partnership is when you’re in initial discussions:
"This may sound counter intuitive but it’s the perfect time to test if you’re aligned.
Every partnership dissolves at some point … and at the time of exiting emotions run high… At the core of this is the ability to have difficult conversations and to put forward your viewpoint and be heard and then have the confidence that your partner has an intention to work to resolve the differences amicably. This invariably will need a shift to the middle.
It is fanciful to think that every partnership will be plain sailing, so stress test it as much as you can and over multiple topics.”
6. Are you willing to set and respect boundaries?
If you’re entering into business with a friend or family member, it is important to know where the boundaries are. Your personal relationship shouldn’t get in the way of your business relationship, and vice versa. Be sure to also keep each others’ lifestyles into consideration. You might be a night owl and have your brightest epiphanies at 2am, but if your business partner has children, then they probably won’t appreciate being called at that time. Set boundaries from the beginning, and be sure to stick to them.