We all know working together with someone daily is not easy. There are a lot of challenges involved, and several disputes might arise due to differences in approach toward business operations. Even two great leaders might face setbacks while working together.
So, is there any methodology that can minimize business partnership failures? Though there is no pre-defined set of rules, there are a few keys for successful business partnerships. And here, I will discuss them to help you select the best possible partner, grow your relationship over time, and overcome obstacles together for a long-lasting business partnership.
What are the Reasons for the Failures of Business Partnerships?
- Mismatched company culture
- Messed up task allocation among partners
- Not analyzing performance outcome
- Lack of commitment
- Focusing only on profit-making
- Not providing value to customers and employees
- Poor agreement on investment and revenue sharing
5 Keys to Successful Business Partnerships
After knowing a few significant issues that can cause a rift among business partners, let us look at factors that can boost successful partnerships. However, I have shortlisted the top five keys for successful business partnerships out of many factors.
- Know your Expectations Everyone’s requirements are different. You and your potential partner must draw a clear picture of what they need to achieve out of the partnership. You must conduct several conversations with your prospective partner to know each other’s goals, strengths, fears, and working styles and analyze if they match. Do not proceed till you both feel comfortable with each other.
What happens if you become partners without understanding each other? You will waste each other’s precious time if you do not share your values and goals. Do not merely depend on market statistics to become a partner with someone who does not share your business goals. Focus on finding a new partner rather than wasting time doing follow-ups with a person or company who does not show a willingness to share their vision or join you right away.
- Create a Legal Operating Agreement Now is the time to work upon an operating agreement. It is a legal binding agreement and hence is a time-consuming activity. Here you put down everything in writing to avoid or minimize any future dispute. It is not an easy task. You have to consider even the worst scenario, like a breach of contract, compensation, or equity. Being transparent and honest and hiring a good and experienced lawyer to prepare an effective agreement is the foundation for building a long-lasting business relationship.
You both must be aware of who will do what from the start. You must split up essential tasks among each other like:
- Product designing
- Customer support
- Accounts and finance management
- Business development
- Human resources
Also, once you divide the activities, you must trust each other and give complete freedom to your partner to handle his set of departments or activities. It will speed up the working process resulting in business growth.
- Indulge in Effective Communication What is the primary factor responsible for the failure of business partnerships? The lack of communication forms the basis of all problems and misunderstandings.
You must know that becoming partners is like any other relationship. You need to invest your time and energy to make your new relationship grow and ever-lasting. Try to spare time from your daily routine to sit together and talk about how you feel, what stress you are facing, and what all decisions affect you. It helps build trust and bond between you, and slowly you will become each other’s support system.
- Accept each other’s Working Style No two individuals can be similar. Each has its working style and requirements. For example, you might not like to work overtime but love spending time with family. But this does not mean you do not complete your tasks. Similarly, your partner might work utterly opposite you and loves to wind up only after completing daily tasks.
What does this mean?
Should you both argue with each other or respect each other working style and privacy?
It means you must accept each other the way you are, and it will keep you balanced.
Focus on getting work done and keep clients happy. However, simultaneously take time to live your personal life that is necessary to keep you charged up for the rest of the activities. I also recommend making this habit a part of your company culture to boost employee productivity and retention.
- Give Company Growth First Priority A growth mindset is essential to overcome hurdles while doing business, and you can find solutions to most problems. A positive approach results in higher profits that you can invest in recruiting experienced staff, good quality tools, and a better customer support system, resulting in better task execution, timely production, and eventually increased revenue.
A genuine desire to work towards the company’s growth will keep you and your partner motivated for a long time, and you both will enjoy each other’s company. You both will never feel isolated and would achieve much higher success than what you could have achieved if you worked individually.
These are the five keys for successful business partnerships. There are many other factors that you might encounter once you start working. However, with time and patience, anyone can overcome the hurdles and keep working towards achieving set goals and taking the company to new heights.
Knowing your business priorities from the start will help determine both the potential partners and whether to take it forward or not.