As a woman-owned business, your enterprise can benefit from strategic partnerships with other businesses and organizations. However, if you and your partner are at odds, this could result in the demise of your new operation. Luckily, you can avoid this result by starting with a solid foundation. Here are seven of the most effective tips for building a successful business partnership.
1. Share the Same Values
Make sure that you and your potential partner share the same values and vision of your partnership. This step is pivotal to ensure a promising future and to avoid possible disagreements due to different understandings about the future of the business. Consider the motivations of your potential partner, the scope of the project, the capital requirements, and your core values when determining if a partner is a good match. Put your vision and mission in writing to help serve as a guide throughout your collaboration.
2. Discuss Each Other’s Needs and Expectations
You can avoid a lot of misunderstandings and resentment by understanding and addressing each other’s needs and expectations. Understand your potential partner’s motivations for wanting to collaborate before entering into an agreement. Also, make sure that you periodically check in with your partner as your business develops since individual needs and expectations may evolve over time.
Be sure that you also communicate your own needs and expectations, too, so that your partner is aware of them.
3. Define Each Partner’s Role and Duties
It is important that you and your partner clearly understand your role and duties related to the business. While it may seem tempting to simply say that you and your partner will both do whatever is needed in the business at the moment, you can avoid possible disagreements or conflict by having clearly defined roles and responsibilities. Not having clear roles can lead to frustration or disappointment in the partnership.
When establishing roles and responsibilities, consider the following:
- Each partner’s job title
- The major responsibilities associated with their job
- Capital requirements for each partner
- What decisions they will have unilateral authority to make
- How disagreements among partners will be resolved
- Which aspects of the business each partner will be responsible for
Reconsider your roles and responsibilities from time to time as your business grows to be sure you fill in any gaps of unmet needs and reconsider whether tasks should be reallocated between you.
4. Choose a Partner You Can Trust
This is the most important step. If you do not trust your partner, you will always be looking over your shoulder and considering their motivations when making decisions that affect your business. This negative perception will be bad for you, your partner, and your business.
If you are considering another professional to go in business with but you are not too familiar with them, you may want to look up public records on the person. This can help reveal criminal records that may point to a pattern of concerning behavior that may make you question going into business with them. Bankruptcy records can alert you to possible financial problems. Also, look into whether any complaints have been lodged against the person with any professional board that oversees them. Reviewing this information is part of due diligence and can save you a lot of frustration, time, and money by helping you avoid a bad partnership.
While you might be tempted to go into business with a friend or family member, consider whether this would be a good match of your skills, personalities, and communication styles. You may also want to consider how the business relationship might affect your personal relationship.
5. Choose a Partner with Complementary Skills
Instead of picking a partner with exactly the same skillset as you, try to pick one who has skills that would complement your own. For example, if you are great at reducing the cost to produce your goods or handle back office responsibilities, you may want a public-facing partner who handles customer service or sales calls.
Acknowledge both your strengths and weaknesses when considering potential partners. This will help you find someone who can help make your business stronger, as well as help you determine which roles and responsibilities you are each better suited for. Additionally, hiring a partner with skills you are lacking can help you avoid having to outsource other jobs. Look at a potential partner’s professional history, education, and personal skills when making your decision.
6. Set Company and Individual Goals
Since you will want to grow over time, it is important to set individual and business goals. This will help you see what you have accomplished and your vision for future success. Also, assign tasks and responsibilities that each partner will have for achieving these goals. Consider what you want the business to achieve company-wide, as well as individual goals regarding growth within the company. Write out your shared goals.
Review and update your company goals periodically. Ask each partner to set their own goals and check in with each other occasionally to see how you are doing with these goals.
7. Collaborate with All Partners in Business Planning
Working together to create a mutual business plan can help you determine if you and a potential partner are really a good fit. It will also help determine if the partnership will be mutually beneficial and you share the same goals as you contemplate ideas for your mission statement, marketing strategy, and revenue objectives. It can help determine whether a partnership may not be the best fit. If you do go into business together, you will now have a solid plan and agreement in place.
Final Thoughts
A business partnership can be a great way to divide capital requirements and responsibilities between multiple parties. However, you need to be sure you know who you are going into business with, whether they are a good match for you, and whether you share a vision for the business’ future. Follow the tips above to build a successful partnership.