Business relations come in all shapes and sizes. They can range from your relationship with your supplier to relations with government officials who could be concerned with your business. These relationships are unavoidable and are usually easier to manage than business partnerships.
Business partnerships are nearly akin to marriages as far as commitment and self-interest go. However managing the expectations of each other is quite a different ball game where profits and livelihoods are concerned. It should come as no surprise that nearly 80% of business partnerships fail. However, while it’s always great to be a sole owner, it could limit the possibilities of expansion in the nascent stages of your business. So here’s our little input on taking into account some fundamentals that can lead to an effective and long lasting business partnership:
- Define your core values and bring them to the table:
This step, as cliché as it might sound, could make or break a business partnership. Identifying and reinforcing the right core values will ensure that all Partners/employees are on the same page and that the good governance of the business is not compromised as you seek greater profitability.
- Documenting policies, expectations and everything in between
What we’re trying to say with this point is pretty basic. It’s something you would provide to a newly appointed partner or employee. That is, how many hours they’re expected to work, information about leave, revenue generation, profit and loss sharing, etc. It is also significant to establish a bottom line for conflict resolution so that a fair conclusion can be derived in such situations.
- Visualise the worst possible scenario
It doesn’t matter if your business partner is your best friend or a distant relative. When money is involved, things can always go pear-shaped. And our good judgement will lie in how prepared we have been with various forms of agreements and documents.
We sincerely hope every business partnerships engages and spends considerable time and resources in the planning phase to ensure smooth sailing in the future.