5 Keys to a Successful Business Partnership
5 Keys to a Successful Business Partnership
Let’s face it: partnerships are hard. Often, two alpha leaders are combined, who now have to agree on any number of decisions on a daily basis. The potential for challenges is a given, but even scarier is the potential for stalemates or disputes that can stifle your business.
On the positive side, a successful partnership can bring together two talents that are stronger together than they are individually. I’m fortunate enough to be involved in the latter, and am running a business with the best possible partner I could have ever asked for. While I realize everyone isn’t as lucky, we have learned over the course of our relationship what keeps things sailing smoothly, no matter the waters your startup encounters.
Set your expectations
First, you need to start off with clear expectations and a deep understanding of what each of you needs to be happy. Just as you would when properly vetting a new client in a professional service business, you need to have multiple conversations with your potential partner about why you are doing this. For example, what are each of you trying to achieve? What scares each of you the most?
Having a deep understanding of your partners’ motivations, goals and hesitations helps you to understand if there is really a match. When making the decision as to whether or not to launch our public relations agency, my partner and I spent nearly six months having these conversations before we felt comfortable pulling the trigger.
Create an operating agreement
Only after getting to this point should you begin the expensive and time consuming process of putting together an operating agreement. Your operating agreement is the legally binding agreement that gets everything down in writing and attempts to minimize the chance of anything being open to interpretation. This gets uncomfortable, as you have to plan for the worst, discuss compensation, equity and recourse in the event of breach of contract. Transparency, honesty, trust and a great lawyer is the only way to get this done effectively.
Throughout this process and having worked together previously, my partner and I knew what we each brought to the table and what really motivated us individually. We clearly understood who was going to take ownership of account service, finance, marketing, business development and human resources. We made the decision to trust each other completely and let each other take the lead in our respective departments. This was critical to avoiding delayed decision-making and helped fuel our growth.
Communicate openly and effectively
Within our first few weeks of operation, we realized we got married, whether we liked it or not. And just as with our real spouses, we had to invest time and energy into this new relationship. We worked together more than 8 hours a day, but weekly, made a point to remove ourselves from the daily grind and sit down to see how the stress of the new business was affecting us.
We stayed open about our fears and always strived to be each other’s support system. As a good friend of mine once said, “If your partner asks for 50, give ‘em 60.” This offhand comment applies to so much more than money, and truly became the approach we took with our partnership.
Embrace different working styles
Most importantly, you must respect your partners individual working styles and personal needs. I’m a father of two young girls and want to spend as much time with them as I can. This means I do my best to be home before dinner each night to get in some play time and help get them ready for bed. While this cuts my days shorter, I’m oftentimes hopping back online at night to get ahead for the next day.
My partner, on the other hand, loves to get in early and shut down once she gets home. We’ve learned this is what keeps us both balanced. It’s worked so well for us, we’ve taken this approach to our staff. Get your work done, and keep clients happy, but also take the time you need to keep your personal life firing on all cylinders.
Keep company growth front of mind
Lastly, most problems can be solved if you run a fiscally smart business and never give up your growth mindset. A business that has healthy margins and is growing allows for investments in tools, support and staff that makes everyone’s life easier. A business that is barely scraping by adds exponential levels of stress that affects everything. From employee morale to recruitment, it all takes a hit.
At the end of the day, it all comes down to humanity, generosity and a true desire to keep the other member of your partnership happy. When you get these things right, partnerships can eliminate the isolation that entrepreneurship inevitably brings and has the potential to accelerate the growth and value of your business beyond what you each could have achieved individually.
This article was originally published on StartupNation.