Choosing a business partner may be the easiest step in the partnership process, but maintaining a successful and thriving collaboration can be a more difficult task. Business partnerships need to be structured from the onset so that in the most difficult and most successful times everyone comes out in a good situation. There are pros and cons to forming a business partnership, so if this is the route a start-up company owner decides to take it isn’t something that should ben entered into lightly.
Partnerships and Business Plans
Writing a business plan is an important part of the start-up process, but it is especially important if you are attempting to structure a business partnership at the same time. Creating guidelines and clearly establishing each person’s responsibilities ensures each business partner is on the same page. A clear business plan is also useful for start-up companies who need capital from a business loan or investor.
Partnerships and Collaboration
The most successful business relationships recognize the strengths and weaknesses of each partner and make an effort to divvy up responsibilities accordingly. One of the biggest advantages of deciding to engage with a business partner is that different people have different benefits to bring to the table. A collaborative effort can increase innovation and creativity. Choosing a partner that is always in agreement may seem like an easier route to take, but sometimes disagreements lead to great ideas. It is important to find a balance between positive collaboration and negative energy.
Partnerships and Agreements
Although a partnership agreement is not required in every business plan, it’s a good idea to have everything spelled out in writing before proceeding. Some business partners prefer to have a very casual or informal agreement that only discusses who is responsible for what area of the business and how the profits or losses will be split. Others prefer to have an elaborate agreement that protects the business as well as the individual partners. When the partnership agreement is established the partners may be in an optimistic and positive place, but plans need to be set in the case of down times within the company. Most importantly, consideration should be given for the creation of an exit strategy in the event that one of the partners desires to get out of the business completely.
Business partnerships can be easy to establish but hard to maintain, so taking the extra effort to make plans and agreements can help keep the start-up more stable for the long term.