The Ins and Outs of Forming a Partnership

Posted on

Are you considering forming a business partnership? If so, choosing a partner can be quite beneficial for your company—if you find the right partner. Below are several tips to keep in mind when considering a partnership.

Where to find a Business Partner

Finding the right business partner is half the battle. If you don’t already have someone in mind, where do you go to find one?

Consider a co-worker

Choosing a co-worker to be your business partner is a great option. How so? Well, working in the same business, you know their strengths and weaknesses, you know how hard they work and if they show up on time or are always late.

Consider a close friend

Best friends tend to be the best business partners. You trust them and enjoy their company, both of which are crucial elements. But partnering with a friend does come with some drawbacks. It’s possible that if your business venture doesn’t work out, you could lose your friendship.

Consider networking online or through in-person events

Virtual and in-person networking events are great places to find a business partner because you already know something crucial about the people who attend: they’re hungry for success and eager to get to work.

Consider a sibling or other family member

Like a close friend, choosing a sibling of other family member can be a great option as well. Not only is there familial trust, there’s familial loyalty too that can take years to achieve in other relationships.

Ensure Balance

Now that you know where to look to find a business partner, what do you look for in a business partner?

Well, the best partner balances out your strengths and weaknesses. For example, if you like to think about your business in terms of the big picture, your partner should like to focus on the small details required to run a business and understand how to make your big picture a reality.

This is a particular important balance to strike because it’s easy to get stuck in the weeds of running a business in the same way that it’s easy to look at things too broadly and miss the small, but important details.

Because everyone has different strengths and weaknesses, it is extremely helpful for your partner’s strengths to be different than yours. After all, the more strengths you have on your team, the more success you will experience.  Think of your partner as someone who can add unique value to the team.

Consistently Challenge

Finding a partner who challenges you to think outside the box and try new things can be helpful to your business. For example, if you are risk-averse, partnering with someone who thrives on risk can help you begin to think of risk as a positive and as a way to take your business to the next level.

You also don’t want a lap dog–someone who says yes to all your ideas even if those ideas aren’t the best or are just downright bad. You need someone willing to challenge your ideas and you must be able to handle it.

Share the Same Vision

Two individuals with the same goals and passion form a successful partnership. Without this shared interest and energy, problems will inevitably arise and the partnership won’t succeed.

As a result, it is essential to ensure you are on the same page and ready to invest the same amount of energy into the business before entering into the partnership.

Communicate, Communicate, Communicate

Similar to marriage, business partnerships require consistent nurturing and open communication. Without this, the business will begin to fall apart. Be sure to frequently touch base with your partner and stay in the loop on everything happening within the business.

Also, avoid assuming your business partner knows what you’re thinking or feeling. Be honest and nip disagreements in the bud quickly by talking them over. Letting them fester is a recipe for disaster.

Create a Partnership Agreement

Even if you go into business with a close friend or family member, treat your business partnership as a professional business partnership. That means drawing up an agreement to ensure both parties understand their roles and responsibilities and other important details.

Partnership agreements are important in protecting yourself and the business. Instead of developing verbal agreements, these contracts should be in writing and be signed by all partners. Consider including the following in the agreement:

*Allocation of profits and losses

*Percentage of ownership

*Decision-making processes

*Partner roles and responsibilities

*Contributions of capital

*Unanimous vote requirements

*Dissolution of partnership

*Buy-sell agreement

*Non-compete clause

In conclusion

Finding a business partner is a great way to ensure you’re not carrying the full load of running a business. But it’s not a decision to be made lightly.

If you have questions regarding how to properly structure your partnership arrangement. Our business specialist are here to help! Give Inc Authority at call at 866-545-1867.