Making a business partnership can have a ton of amazing benefits. For one, you’re sharing the risk and it helps to take some of the stress out of the whole thing for you. However, there are some silly business partnership mistakes that people still seem to be making. If you want to have success in your new business venture, don’t make these mistakes:
Having Long-term Outlooks That Don’t Match
You and your business partner need to make sure that your long-term outlooks match up before you take the business further. Partners ignoring some of the long-term details due to the excitement of taking on an enterprise is common, but you need to take some time aside to talk about some of this stuff.
You should discuss how to handle situations along the road, and how each one sees the business going in the future. Make sure you have serious discussions about the future so you don’t find yourself disagreeing when obstacles present themselves, when it will be more difficult to decide what to do.
You must both agree on a plan of action to move forward, which is why creating a business plan together is beneficial. Many business partnerships are put together when enthusiasm and excitement about starting a business is high, but this can lead to problems. Each partner should be aware of the other’s time commitment, as well as the positives and negatives before rushing in. Getting excited is great, but don’t go rushing in without doing the important stuff!
Not Using Each Of Your Strengths
It’s a shame that many partners don’t take the time to outline each of their strengths so that they can use them to the company’s advantage. One of the advantages of actually setting up a partnership, is being able to use the strengths of each partner to complement the business. Make sure you determine yours!
Failing To Form A Limited Partnership
Some businesses to function well as general partnerships, however, you really want to consider a limited partnership if you’d like to protect yourself. A limited partnership has the benefit of ensuring the limited partner isn’t responsible for the actions of the general partner. This is a big advantage if you are backing the business financially, or you can’t put in the same time/commitment as the other partner. A partnership that is imbalanced or is simply perceived as imbalanced can literally cause chaos for your new business.
The Absence Of A Written Agreement
Having a written agreement is absolutely crucial when creating a partnership. A written contract solidifies and clarifies the terms of you and your partner, or even multiple partners. This will help to cover issues such as each partner’s tasks and responsibilities, how income will be divided, and more. If you want to know what makes a legally binding contract, then an experienced lawyer could draw up a contract for you. Make sure you also lay out rules around changes to the structure of the contract. You should each map out your shared understanding of the agreement too, so you know you’re on the same page.
You run less of a risk of making mistakes if you find a legal professional who can help you to draw up this contract. Many partnerships require a lot of paperwork, and you may need to review and complete many forms.
Having Different Customer Service Protocols
Customers must be happy with the interactions they have with the business; that much should be obvious. Your customers are one of, if not the most important things to your business.
One measure of customer satisfaction is that the customer feels they are being dealt with in the same way each time. They should know what to expect, just like they know what to expect when they head to their favorite restaurant for dinner. If a big business doesn’t have quality service, problems are going to arise.
If each partner has a completely different way of dealing with customers, they can find that those customers avoid the business in future, as they just won’t know what to expect. Everything across your business must be consistent, especially customer service.
Customer service needs to be standardized regardless of how many partners are running the show!
No Exit Strategy
When you go into business for the first time, you really don’t want to have to consider what you’d do if it didn’t work or either of you wanted to leave. However, if you don’t have an exit strategy, you’re leaving yourself open to running into a ton of problems later on down the line.
Everyone eventually sells up, whether that’s by actually selling the business, passing it to family, or because of serious injury/death.
A signed written partnership agreement should contain the outlines for under what circumstances each partner can leave, and who they can pass the business onto.
Make sure you outline what happens to your share of the business if you become medically unable to run the business or die. It’s not something you really want to think about, but it can be very important.
It can be very difficult to agree on things like this in the future if you don’t create an exit strategy around it now. If a difficult situation did arise in the future and there wasn’t an exit strategy to look to, you’d likely feel overwhelmed and unable to make decisions like this. Make them now instead.
Getting a business partner isn’t right for everyone, but it can really help your business to expand and take it to the next level if you do it right. Make sure you avoid the silly mistakes outlined in this post and you should be able to set up the most suitable partnership for your business. Obviously, you also need to pay attention to who you choose as a partner. Not only should your views and goals for the future line up, you should also ensure you have good chemistry so you are able to work closely together.