Build a good partnership to build a successful business
Last night Pavlo and Bruce spoke about partnerships in business. So often these can make or break a small business. You can listen to the full show here.
So what are the benefits of the right partnership?
- Shared risk
- Two sets of eyes on the ball
- Play your strengths
- Double your resources and networks
So how should you approach finding a partner?
First, ask who your partner is. You'd be astounded at the number of clients who literally know nothing about their partner’s background, their approach to business, and their vision for the partnership. They rush into the relationship so quickly that they don’t even gather this fundamental knowledge about their partner.
Secondly, trust is essential. Talk is cheap. Do your research and check them out. Then understand their values. Know their approach to family because of time, how they view money because of investment direction, and what their purpose is because of vision.
And finally understand their skill set. These should ideally be different to yours. Every business has two main elements - promotion and delivery. Decide who will be accountable for which and who is best suited to which. It doesn't work if you both are doing the same or want to do the same and will be put pressure on the business and relationship.
So you think you've found the right partner? Pavlo suggests the following when entering into the partnership:
- Date before you…marry Divorce is expensive and a waste of time, energy and potential.
- Test for compatibility, capability, skill match
- Structure the partnership Consider the following:
- Roles and responsibilities
- Delegation authorities
- Contributions of resources
- Rights to remunerations
- Dissolution or exit strategy.
- A buy-sell provisions
- Non performance or delivery.
- Non competing & confidentiality.
- Sustain the partnership
- Work harder than if you are on your own. You're accountable to someone other than yourself.
- Ensure that your bookkeeping, accounting and compliance is in order.
Tags: The Money Show