Building Business Partnerships
If you want to start a business partnership, you need to look for the right partner. It is important that you choose one that you can trust and discuss things about the business.
Know the key points and the business will surely succeed.
Most of the successful businesses are those that have business partners. Whether you’re starting a new business or you already have an existing one, you should consider building business partnerships. Regardless of your reasons, it is vital that you take things slowly and pick the best partner that you can find.
Certain circumstances lead to the building of partnerships. It is vital that you know your partner very well and you can trust him or her. Problems and issues are sure to come along the way and this will test the strength of the partnership. There has been a lot of news about business partners going their separate ways because of misunderstandings and other problems.
Key Points in Choosing a Partner
It is vital that you consider these key points:
- Equal commitment – when it comes to division of work, the business partners should have equal rights and responsibilities’ this is the best way to prevent potential conflicts.
- Ownership should be agreed upon in advance – just because there is equal commitment doesn’t necessarily mean that the ownership is equal as well; the ownership of the business will usually depend on the capital contribution of the partners.
Creating a Good Partnership
In order to create a partnership that will win in the end, the partners should share the same mission or vision. They should focus on the same short term and long term goals. The business roles of each partner should also be determined in advance. Consider the strengths of each if the partners and use them to the advantage of the business.
Although it is logical to have a 50-50 share in the ownership, this isn’t always a good decision. The one with the highest capital contribution can get a larger share and to resolve disputes, monthly meetings should be held. An agreement should also be drawn. Legal documents may be able to arrange possible problems and misunderstandings that may arise. This will usually include the equity, business type, sharing of profits/losses, asset distribution, compensation of partners, and many others.
Partnership is not just about money. It is important that you have a good relationship with your partner. There are many difficulties and challenges that you’re sure to encounter, and with a strong foundation, you will be able to surpass the bad times of the business.
It is rare to find successful partnerships but if the business thrives, you are sure to enjoy higher profits or revenues. The decisions made by the partners should be discussed properly to make sure that the business doesn’t suffer in the end.