Tips for forming a successful business partnership include clarifying responsibilities, establishing a shared vision and mission, defining skill sets, crafting a fair agreement, and outlining conflict resolution strategies. Partners should also establish clear short-term and long-term business objectives and review them frequently.
A good business partnership is, in many ways, a good marriage. It’s important to clarify responsibilities, expectations, and how the partnership would actually work on a day-to-day basis. Some of the best tips for forming a business partnership are establishing a vision, considering skill sets, defining responsibilities, establishing strategies for conflict resolution, crafting a fair agreement, clarifying work ethics, and clearly outlining goals.
It is vital that partners know if they share the same values and have a common vision and mission. Before forming a business partnership, it is important to find out each person’s motives, goals and expectations. A good way to do this is for partners to imagine the business running smoothly and discuss what that might look like. It’s a good idea for partners to clarify what the outcome will be and the methods that can be used to achieve that goal. After the purpose, vision and mission of the business have been clearly defined, partners should commit it to paper and use it as a reference to guide the business in the right direction.
Everyone has their own strengths and weaknesses, and it’s important that these are capitalized on when forming a business partnership. Partners should make a list of each person’s current skills, as well as skills each partner may be willing to acquire. If there is any skill that is missing that is vital to running a successful business, partners should consider outsourcing that particular function. For example, business partners are better off hiring people specifically to handle accounting or marketing functions if none of the partners has any knowledge or interest in these areas.
The next step is to analyze everyone’s expectations and clarify responsibilities in very specific terms. For example, if one partner is contributing more financially and the other is employing more manpower, it should be clearly defined what kind of work and how much of it is expected from the working partner to avoid later disagreements. If either partner is taking on additional responsibilities outside of what was previously agreed, it is important for the partners to discuss how they will be compensated for these responsibilities. Partners must also draw up a written agreement that summarizes all of this, discusses profit sharing, and contains exit clauses and procedures should one person wish to withdraw from the partnership.
There will be times when disagreements arise, and it’s best that partners know how to resolve them easily, without letting resentment and disappointment fester. They should make a point of meeting regularly, like once a week, and allowing everyone to voice their opinions on how things are going and resolve anything that might be an issue. It is also best to have an agreed strategy for resolving conflicts when forming a business partnership. For example, partners can agree to address the issue instantly, call a meeting, and agree to come up with one or more possible solutions.
It is also important when forming a business partnership for the parties to establish clear short-term and long-term business objectives that meet the expectations of all partners. These objectives should be set out in writing and reviewed and updated frequently. It is good practice for partners to establish personal goals that relate to the company’s goals.
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