Did you know that around 80% of all business partnerships fail? If you’ve ever been in a business partner relationship (or any relationship for that matter), you understand the struggles that go into it. No matter how well you work together, there will always be instances when you run into disagreements. And in business partnerships, these disagreements can lead to serious consequences for your organization. So if you want to be sure your partnership survives for a long time, here are a few important elements for a successful business partnership to keep in mind:
Did you work with your potential business partner before? Were your shared projects successful? Test your relationship by working together on a few things first before you decide to enter a legal partnership. Sometimes, no matter how well you match business-wise, you just can’t work together due to personal views and vice versa, and that’s totally valid.
This might sound too logical to have to be written down like this, but there’s no way your partnership will work if you and your business partner don’t have the same goals. At a core level, this has to be true if you want to reach shared success. For instance, let’s say you’re in the music business and want to boost sales. Your partner needs to strive towards the same goals. Before you sign your partnership, define your goals and find a strategy that will help you reach them.
Complementary skills yet same reputation
It just makes sense to partner up with someone with skills that you and your organization do not have available. Sharing a partnership with a company with skills you lack yet need (and vice versa) will allow you to double your advantages over the competition. Also, this allows you to focus on your strengths allowing someone else to fill out any gaps in skills.
On the other hand, it’s necessary for your partner to have the same reputation as you. When choosing a business partner, check their quality of service and overall reputation on the market. If your reputation is stable, it’s not smart to enter a partnership with a company with a poor track record. To avoid any weakening of your potential, find a company with a similar reputation as yours so you can be true peers.
Business partners are quite similar to all other relationships you have in your life. In partnerships without respect and appreciation, you can’t expect for the relationship to last and be fruitful. Therefore, show your verbal appreciation whenever you can, especially at conferences, meetings, and other public events. Also, it’s smart to surprise your business partners with a little gift from time to time, especially for holidays and after successful quarters. Make the gift personal and thoughtful to show your attention to detail. For instance, if you know your business partners are outdoorsy people, quality OTF knives might be a great present. They are durable, small, and symbolic of your shared sharp sense of business and cutthroat attitude towards the competition. If your relationship is strictly business-like, a gift basket, dress watch, and spa vouchers are always appreciated.
In many instances, one of the main reasons why partnerships fail is the different levels of commitment. For a business relationship to work, it’s necessary for both sides to be fully engaged, financially and time-wise. This way, your success will strongly depend on the success of your partner and your objectives will always match each other well.
During the process of the creation of the partnership, it’s necessary to include one important component—responsibility. It’s important to settle on accountability for failure in case one of the partners doesn’t bring the expected results. If you manage to define accountability in time (before your business relationship becomes legal) you can follow the map of accountability in the future. And since both parties have responsibilities, the partners should be able to hold each other accountable when needed—this is a two-way street.
It’s important to have realistic expectations from your business partner. Your partner might be starting a family, while you might be in the process of moving or handling certain personal issues. One partner might want to cut their work hours to spend more time with their family while others might need more time to travel. Agree on your private life requirements upfront so you can avoid any anger and resentment in the future.
If you want to grow your business, enter a new market or enjoy more free time in your career, entering a partnership might be a great idea for you. Strong business relationships allow you to improve your business using skills that you don’t own. However, it’s crucial to have a stable business partnership with a firm foundation and structure. Your expectations must be realistic if you want to reach your goals. Maintaining a good business partnership takes effort, but if you do it well, you can reap many amazing professional and personal rewards.
Written by Brigitte Evans