While there are many good reasons to take a business partner on board, it is not something which should be entered into without sound consideration. For a start, you’ll need to know why you want to bring a partner on board and exactly what it is that you expect of them. A partner should bring complementary skills to the table, be able to take up the slack and boost the company’s productivity as well as profitability.
So, as you can see, there are benefits to setting up a partnership but what should you definitely do and definitely be wary of? Take a look at our list below to ensure you can make the best of any partnership opportunity.
Have Clear Objectives
It’s important that there is a meeting of minds regarding the way forward for the business, especially if your competencies are complementary rather than aligned. Beyond simple strategy though, there must also be an understanding of responsibilities and how much time and effort a partner is prepared to devote to the business.
Have the Hard Conversations
Communication is key and you should be in regular touch with your partner to make sure you remain on the same page. Some things like renumeration and what percentage to reinvest in the business can be difficult to discuss but shouldn’t be ignored. These will of course be covered in the contract, but you need to have the conversation first.
Formalise the Arrangement
An agreement is needed and should cover every eventuality where there may be confusion, disagreement or a change. You’ll need a lawyer to draft this for you but it is worth it. The last thing you want is a court deciding what happens to your business when you could simply follow what is written in the binding agreement you both signed.
Remember the intangibles
With a new partner, there is a renewed sense of purpose along with a spike in motivation. It’s also easier to celebrate the wins with a partner. These things may not appear on the balance sheet but if a new partner can keep us excited about new opportunities and possibilities, we cannot attach a price to that.
Don’t rush things
Finding the right partner can take time and even after you have found someone who you think maybe suitable, you may still have lingering doubts in your mind. There are companies who can help you to find a partner or you could try taking on a partner for a single or a series of projects and see how things progress from there.
Leave it to chance
This may sound beyond obvious but you must do your due diligence on any potential partner. This will include a thorough review of their financial position, record in business and reputation. Getting this wrong could land you in a situation where you are legally beholden to a liability rather than an asset.
Micromanage your partner
As a business owner, you should be aware of how important relationships are with your customers and this goes for the people you work with as well. I know the business is your baby but you if brought this person in willingly as an equal then they have the right to expect to be able to get on with work without constant, unnecessary scrutiny.
Don’t get disheartened by setbacks
As changes in business come thick and fast, the transition to a partnership may throw up a few surprises that you weren’t expecting. So, if you’re not setting the world alight within the first few weeks, do not see this as a failure but rather as a process of laying the fondations for future growth and success.