While a strong business partnership is extremely rewarding and can deliver excellent results, there are a number of challenges that are likely to be faced along the way. Ensuring your working relationship with your business partner remains strong is the ideal way to guarantee the continued success of your business partnership.
It is important that all members of a business partnership work together as a unit from the very start. A business partnership agreement ensures that the expected responsibilities of each member of the partnership are pre-determined, leaving no opportunity for confusion over the role of one or more partners. This makes it extremely unlikely that any tasks will be accidently neglected and productivity or profits being damaged as a result.
The keys to a strong business partnership
As well as clear guidelines on the exact responsibilities of partnership members, there are a number of other factors to maintain a strong business partnership. Some of the most important actions that can be taken to keep your business partnership strong and productive are as follows:
- Regular and open dialogue between partners.
- Sharing of honest and constructive feedback.
- Ensuring all partners are flexible and receptive to new ideas.
- All parties involved striving for mutually beneficial ‘win win’ agreements to issues.
- Adapt a partnership first mentality – What is the best solution for everyone, not just your own personal interests?
Of course, while a strong working relationship is extremely important, the key consideration for any business is profits. Financial decisions are therefore one of the most essential considerations to be taken into account as part of any business partnership.
Ensuring financial stability in a business partnership
It is a commonly held belief for many people that the profits in a business partnership are split 50/50, or an otherwise equal split if there are more than two members involved in the partnership. While this may be true in some cases, it is certainly not the only way in which profits are divided. If one partner can afford to invest more time than the other, it may be fairer for them to receive a larger share of any income.
A different split could also be agreed if one partner has contributed more backing to the initial start-up funding, while the way taxes are paid is also something which should be considered very carefully. Partnership tax can be a complicated issue, and can easily lead to a partnership dispute if it is not calculated correctly.
By quickly determining the financial input and output of each individual partner, you will ensure that your business partnership is built on a strong foundation and that the core of the business is being protected. Once the money side of the business is taken care of, mutual respect and communication between partners is the key to a strong working relationship and the continued and expanding success of the partnership.