5 Steps to Make Business Partnerships Work

Business.com / Starting a Business / Last Modified: February 22, 2017

According to Robbinex Inc, a firm specializing in the sale of mid-sized privately-held companies, the majority of business partnerships...

According to Robbinex Inc, a firm specializing in the sale of mid-sized privately-held companies, the majority of business partnerships don't make it past 3 ½ years.

Having been involved in business partnerships in one form or another for more than 10 years, I can tell you, like everything else in business, there's a right way (that increases your chances of success) and a wrong way (that decreases your chances of success) to go about making business partnerships and relationships work.

The wrong way is to jump in blindly head first hoping the concrete pool has been filled with water. Sometimes you get lucky. Other times ... ouch!

The right way to go about this involves 5 key steps:

1. Relationship discovery

2. Role specification

3. Ego reduction

4. Money matters

5. Acceptance

Sounds like too many pieces to the puzzle? It's actually easier to solve than you may think.

1. Don't Ignore Your Gut

This is all about your gut feeling. Through your communications, in person, by email, on the phone, and so on - how do you feel about this person? If good, move forward. If bad, it's probably time to abandon ship. Your gut is usually more accurate than you give it credit for.

Think you can rush into finding a perfect match? Think again...while you can get lucky, these things generally take some time. Like any relationship, the more you know about your potential partner, the more comfortable you become.

In business as in life, you can only move to the next step when both of you are comfortable with each other and ready.

 

2. You Cook, I Wash the Dishes

So your partner has passed the 'gut feeling' litmus test. Right on!

Now it's time to sort out what roles both of you will play.

This may sound trivial, but it's not. The earlier on you decide what each of you will focus on, the more efficient your work will be, and the fewer disagreements you'll encounter.

Figuring this out early makes you both accountable and sets expectations that you've both agreed to.

When a problem arises, and they always do, you'll be able to quickly find the hole that's causing the problem, plug it and move on.

 

3. Avoid the Ego Trip

We all have egos. Dictionary.com explains "ego" as "the self of any person and distinguishing itself from the selves of others."

Most of us have knee-jerk reactions when it comes to protecting our egos. And that's fine except when you take it too far.

Both you and your partner should express your opinions on all matters. But you also must prepare for criticism and understand its all part of the relationship. It is healthy. Accept it. Value it... and keep moving forward.

The classic downfall many partners face is the desire of one to always be better than the other. And while competition is a great thing, too much of this can flush the business' potential down the drain.

Solution: You and your partner should aim to excel in the areas of the business you are focusing on. The result is that you'll both be 'the best' at what you do and the business will benefit too.

 

4. Show Me The Money

The winner in the category of partnership destruction is...you guessed it, money.

There's no issue more contentious than money. One partner thinks the money should be spent on a new Web site, the other on improving the product. One feels she's working more than he is so she should get more money even though they both own 50% of the business.

The best solution for ridding this nagging problem from your business is to set out before the partnership gets too deep how money will be handled under every imaginable circumstance. For example, if you're running a consulting business, you'll want to discuss how consulting fees, office expenses, meals and entertainment, payment from speaking opportunities or product sales will be managed.

Even with all the planning in the world, things change, and there really is no magic bullet. The best advice I can provide is to be honest, completely transparent and review your finances on a regular basis.

The better both of you have a grasp of where the business is at and discuss your strategy around money openly, the better off your partnership will be.

 

5. Acceptance

The billionaire Seymour Schulich in his book Get Smarter dishes out very wise advice when it comes to relationships.

He suggests that you "Stop trying to control" your friends, relatives, partners and business partners.

This comes down to acceptance. Once you've successfully passed the first and second steps above, you should know how your partner works, how they think, and how they act.

Too many people go into relationships hoping and planning that they'll change their partner to become more like themselves. That's a recipe for disaster.

You are who you are, they are who they are. As Schulich says, trying to change someone "will make you very unhappy."

Business partnerships can be immensely powerful. Use these 5 ideas to make your next partnership a success.

Photo credit: smallbusinessdelivered.com

Michael Zipursky is a business consultant and co-founder of FreshGigs.ca, a jobsite specializing in marketing jobs in Canada. His work has been featured in FOX Business, the Financial Times, HR Executive and other media.

 

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