A business partnership is like a relationship. Success depends on communication, negotiation/compromise, collaboration and mutual investment. Turns out, “65% of businesses fail due to conflict and relationship breakdown between partners,” according to Harvard Business School. Both relationships and business partnerships are complicated so it’s important to follow some guidelines in order to be successful.
1. Create a strong foundation: draft a co-owner agreement where all parties are clear on how things will be run. How will decisions be made? How will profits be split? Have uncomfortable conversations now to avoid turmoil later. Be upfront and honest in the beginning and keep that ball rolling throughout your time as a partner.
2. Discuss long-term goals: this is a BIG one. Knowing what each other’s goals are will be important. You will want someone with similar values and fully committed to getting there together.
3. Clear communication and act like an adult: it’s inevitable that conflict will arise. How you handle it will speak volumes about you as a leader. Listen, respect your partner(s) and take responsibility for your own mistakes.
4. Lay out strengths and weaknesses of each partner: one of the benefits to a business partnership is that they complement you with things you may lack.
These are just a few of many guidelines to follow when creating a business partnership. We’ve only listed a few of our top points. The advantage of a successful business partnership includes: new perspectives, extra support, possible expanded expertise, varied incomes, shared expenses, etc. The list goes on and on. However, that being said there are some typical pitfalls, such as personality conflicts but if you follow good guidelines when creating the partnership, they will be avoided.
