Partnerships are like double edged knives, on one hand they can give you the much needed support to be successful in your business and on the other hand they can destroy your business if you are not careful enough. Here are a few ways to make sure that you survive a bad partnership.
- Use a business plan to help you to organize your business’s organization and goals. This way, you both work together to achieve one, overall view of what the business will offer.
- Put in place a method for making decisions when you both cannot agree. For example, insist on a cool down period between both partners before important decisions are made. Or, elect to use a third party to help understand the true value to the business.
- Ensure that the partner you work with is someone you know well. If you do not know them well, make it a point to get to know them. Understand how they work and what type of outlook they have.
Often, two people need to be able to get along in a partnership just as in a marriage. You need to realize that you both may have other goals but to make things work, you need to focus on the business’s best interests.
The Value of a Partnership Agreement
Because so many things can come up and change, it is critical to have a legally binding contract between all partners. The following are some elements that should be a part of the partnership agreement, at the very least.
- The compensation each partner receives. Determine how profits will be shared and if the business partners will take a salary.
- Organize a management structure for the business. Both parties cannot be the head manager involved. Rather, each partner should have operational responsibilities of their own. Or, determine how decisions will be made.
- Outline work hours, vacation time, business activities partners are allowed to participate in (and which they are not) as well as the name and the address of the business.
- Specifically state what the duration of the partnership will be. How long will the partnership remain in place until a new decision must be made?
- Outline the purpose of the business, too. This should include what the goal of the business is and how it will achieve that goal. Again, a business plan is very effective here.
As a business owner, or soon-to-be partner, it is critical to focus on all of the advantages and disadvantages that the business owners could experience. It is possible to have a strong, long-term partnership. The key is to go into the partnership with your eyes open and your ability to handle differences understood. When both partners are on the same page, you can achieve success like this.
