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A good business partnership is in many ways like a good marriage. It’s important to clarify responsibilities, expectations and how the partnership would actually operate on an everyday basis. Some of the best tips for forming a business partnership are establishing a vision, considering skill sets, figuring out responsibilities, setting strategies into place for conflict resolution, drawing up a fair agreement, clarifying work ethics and outlining goals clearly.
It’s vital for the partners to know going in whether they share the same values and have a common vision and mission. Before forming a business partnership, it‘s important for each person‘s motives, objectives and expectations to be figured out. A good way for this to be done is for the partners to imagine the business working perfectly and to discuss what that might look like. It’s a good idea for the partners to clarify what the outcome is going to be and the methods that might be used to achieve that end. After the purpose, vision and mission of the business have been clearly defined, the partners should commit it to paper and use it as a reference to steer the business in the right direction.
Everyone has his or her own unique strengths and weaknesses, and it’s important for those to be capitalized upon when forming a business partnership. The partners should make lists of each person's current skills as well as the skills each partner might be willing to acquire. If there are any skills that are missing and are vital to running a successful business, then the partners should consider outsourcing that particular role. For instance, it’s best for business partners to hire people specifically to handle accounting or marketing roles if none of the partners have any expertise or interest in those areas.
The next step is the analysis of everyone’s expectations and clarification of responsibilities in very specific terms. For instance, if one partner is contributing more financially and the other is putting in more labor, then it should be clearly defined what kind of work and how much of it is expected from the working partner so as to avoid disagreements later. If any one partner is taking on additional responsibilities outside what was agreed upon earlier, then it’s important for the partners to discuss how he or she will be compensated for those responsibilities. The partners also should draft a written agreement that summarizes all of this, discusses the distribution of profits and contains exit clauses and procedures in case one person wishes to withdraw from the partnership.
There will be times when disagreements crop up, and it’s best for the partners to know how to settle them easily without letting resentment and disappointment fester. They should make it a point to meet regularly, such as once a week, and allow everyone to air their views on how things are going and resolve anything that might be an issue. It’s also best to have an agreed-upon strategy to resolve conflicts when forming a business partnership. For instance, partners can agree to bring up the issue instantly, call for a meeting and agree to present one or more possible solutions.
It’s also important when forming a business partnership for the parties to establish very clear short-term and long-term business goals that meet every partner’s expectations. These goals should be put in writing and should be reviewed and updated frequently. It’s good practice for the partners to form personal goals that tie in with the company’s goals.
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