Partnerships are one of the ways to ensure a
business stays profitable. A good partnership has the propensity to improve the quality of decisions, output and revenue of any business. However, partnerships are not emotional decisions. They have to be thought through and here are some of the things to consider before a
business partnership.
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Have Shared Values, Not Personalities
In a partner, you are not necessarily looking for someone who is like you or looks like you. You should be more considerate about the thought process and values of your prospective partner. This gives you an idea of the kind of mindset this individual possesses, and how they are likely to respond and make business decisions. It is also great to determine how trustworthy your partner might actually be. This does not mean the person must have the same personality traits as you, as it is inconsequential in the success of a business. You are not seeking a friend, but a partner.
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Have A Contract
A contract spells out explicit roles, expectations and deliverables of each partner. It should also specify assets, ownership and revenue split. Essentially, a contract defines how the partnership structure should seem, and helps to clarify any area of ambiguity. A contract is a valuable document that helps solve any form of conflict that may arise in the future from the partnership agreement.
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Have Considerable Knowledge
It is usually advised to know your partner for at least a year before deciding to be in bed with them. Whilst it is true that you cannot know a person in all its entirety, it is great to, at least, have a head-start. You don’t have to be best buddies, but you should know him enough to analyze behavioural traits, how he reacts under pressure, and managerial skills among others.
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Have Aligned Business Goals
You and your partner must have the same goals for the business, as you have become drivers of the business. It reduces conflict, friction and creates stability. It also helps to achieve goals faster as you are not the only one passionate about achieving the goal. Get into business with a partner who unilaterally shares the same business goals and vision as you do, and this can easily be deduced from consistent communication.
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Have An Exit Plan
From the start, you and your prospective partner must have a clear exit plan and distinct deal breakers for your partnership relationship. This should also be captured in your partnership contract. You must also specify the timeline you believe the partnership should run for, and how to dissolve it without having any adverse effect on the business itself. Don’t be afraid to walk away at any point of the partnership if it is clearly seen that it is helping neither party.
Above all, it is important to have a trial run for a limited period which reveals how well you both work together, and if the partnership is viable. It also helps you and your partner come to terms with the reality and implications of a partnership contract, before it actually begins. Choosing a partner could make or mar a business and it should be given the attention it deserves.
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