All You Need To Know About Small Business Partnership

 | Business

A business partnership can be very exciting if your partner has the same vision, working style and opinion as you do. The right partnership can scale the new heights of your business venture while a wrong choice can cost you your career.

Whether your business partner is an old school friend, a close relative or a person who you bumped into a few weeks ago, starting a business with someone is exhilarating.

Having said that, before you invest your hard earned money on a new partnership, take a look at the small guide we have prepared for you. This will help you analyse your partnership from every possible angle for you as well as your partner’s sake.

The foundation of a strong partnership

A good and long-term partnership is a long-term and serious commitment that you’ll make to your partner as well as your business. Both partners need to maintain mutual understanding and long-term compatibility. You should have similar goals, expectations, financial resources, visions and value for the venture to really work.

Of course, here compatibility doesn’t necessarily mean being like each other or agreeing on all points. But, yes, a small business partnership means taking any step or performing actions with mutual interest. But most of the times, the stress of starting a new venture and the fear of failure lay the groundwork for a rift between the partners.

Fortunately, you can set your small business partnership goals for long-term by following a simple step and that is by setting expectations and following it through.

Expectations

While setting expectations might not be easy, it is an essential task that you must perform. You need to clarify each and every angle of your partnership and decide how long you plan to carry on with it. This clarification should be in verbal as well as written format.

So before you pick up a promo pen to sign the documents, make sure you’re aware and in agreement with your mutual and conceivable goals.

Make sure you have the discussion over what position you both will hold in the business and who will be taking care of various responsibilities. To help you understand this better, we have compiled a list of questions that you should ask yourself before sealing the deal.

What is your motivation?

Your partner is not necessarily your blood relative or dearest friend. So, what took both of you on the same track and inspired you to work together? Is it only the money factor or you share some personal interest in it as well.

What is your motivation behind venturing into the business? What outcomes do you see from this relationship in the future? Before you start, know where your motivation lies so that you can lead your business in the right direction.

Why a small business partnership?

What is the reason behind pursuing a small business partnership? Why do you think that getting into a partnership is a good business decision instead of being a sole proprietor? What type of complications and negotiations you’ll have to deal with as a small business partner. Now, if you are saying that going alone is risky then obviously this is not the proper reason for initiating a partnership. Also, make sure that this business structure fits your personal as well as long-term interest.

Do you and your partner share the same values and vision?

It goes without saying that you and your partner are going to deal with the same work structure. However, every decision taken by the both of you will not necessarily be mutual.

Obviously, your personal values and vision will influence your decision-making skills and accordingly designing the future path.  Aligning your values is critical in maintaining good partnerships.

You can work together to determine whether your priorities and standards go hand in hand or if there are differences in opinion, how you can work around it.

The better you know your partner, the easier it would be to run the partnership smoothly. Your mutual understanding will reflect in every step whether it is decision making or solving conflicts with clients or managing the day to day work efficiently.

So take some time and discuss the key questions with your partner to avoid the risk of splitting in the future. Being straight and clear in the beginning is better than arguing later and ending up separated.