Business partnerships can be rather beneficial for new and struggling businesses. They allow them to combine their skills and funds with another company and thus make a name for themselves in a competitive market. It’s also helpful for taking out loans and funding larger projects needed for setting up a company.
It’s important to have in mind that linking your business with another company also has a few disadvantages and these should be taken into account in order to make your partnership long-lasting and beneficial to both parties.
It may seem like it’s a good idea to get into a business partnership with someone you know personally and someone you can trust. Having a personal bond and a trust that’s lasting for years can truly be useful in business relations, but it can also cause a lot of trouble and many advise to stay clear of such deals.
A lot of businesses fail and debts that they’ve created can follow the owners for years after. This can be rather damaging to personal relations and it’s best to keep personal funds separate from those that are business related. The same should be done with personal relations whenever that’s possible.
Have common goals
These partnerships are created to help both partners achieve their goals and promote each other with infrastructure and sometimes with funds. In order for this to be lucrative partners need to have clearly defined goals as they relate to both companies and each of them individually.
Common goals need to be something that’s measurable and obtainable and they need to be beneficial to both companies. Also, it’s helpful if there’s a timetable for their accomplishment because that will make it easier for both parties to reconsider the agreement.
Define job roles
When small companies create a business partnership, the biggest advantage comes from having a bigger workforce and expert employees from both companies to rally on. This especially the case if one of the companies lacks administration and infrastructure, while the other lacks production and distribution.
This is why it’s important for partners to clearly divide job roles in ways that complement the needs and the skills of the companies and their workers. This will also make it easier for the companies in case the partnership splits up because everyone knows what they bring to the table.
Making an impression
Creating a lucrative partnership isn’t always about making business deals and dividing labor. It’s also about forging a strong personal relationship with potential partners. Most of this is done with a first meeting and a first impression you make on your business partner. This isn’t something you should be stingy with.
In fact, taking the time to make the first impression by having a Sydney Airport chauffeur meet your partners can mean a lot in terms of establishing a productive business relationship. The same goes for providing a hotel or other accommodation if needed.
Regardless of how strong partnership you have, there are going to be disagreements on the job. These usually become more intense when things aren’t going as you’ve planned for your business. It’s best to have this in mind and put systems in place that will allow you to handle them productively.
Having an open forum on which everyone can voice their concerns and tell what’s bothering them about the partnership is the easiest fix. That forum should treat employees of both companies as equals and allow everyone to challenge the existing agreement if they feel that they aren’t fair or productive.
When there are a lot of people involved in running a company it might be difficult to decide on how decisions are made. This is especially the case when people in questions are all business owners and managers that are used to making big calls on their own.
This is why the decision making should be something you agree upon before the partnership is in effect. Sometimes you’re going to have to vote on the matters that you can’t agree about. It’s imperative for everyone to accept the decisions they don’t agree on or the partnership won’t last.
When things go wrong
The truth is that most businesses fail within the first year. When of the companies in a partnership goes bust it will affect the other and possibly even bring it down as well. Both partners benefit from preparing for this option from day one.
The preparations should go into details and handle how you’ll divide clients and customers and who will be in charge of remaining assets. Things get even more complicated if the company is in debt after it fails and business partners need to address this option as well.
Long-lasting business partnerships are built on trust, but there should also be a lot of planning involved. Having systems that are made to address the potential problems of a partnership will keep it productive and beneficial to everyone involved.