Starting a business can be a scary proposition, and many entrepreneurs feel more comfortable going into a new business venture with a partner — either someone you have worked with in the past, or someone who recruits you to go into business together. And just like most people don’t enter a marriage planning for divorce, partners may enter a business relationship never foreseeing the day when a partnership may sour.
When you go into business together, maintaining a strong working relationship is a key factor for the success of the business. Here are some tips on how to find and develop successful business partnerships:
Shared vision. Many business partnerships end in divorce because the partners have different visions of what success looks like. Before you take on a business partner, be sure your goals and visions are aligned so competing goals don’t derail the company.
Work well together. Crafting a business plan together with all partners involved will give you insight into how and where each of you fit in the business. Collaborating on a plan, developing your business goals and marketing strategies, and defining your mission will give you a good sense of whether your partnership will be mutually beneficial.
Understand commitments. It is probably unrealistic to depend on all partners to give 100% of their time and energy to starting a new venture. Some may need to continue to work at other jobs or have other external commitments. Be sure everyone understands the amount of time each partner has to give to the new company to eliminate misunderstandings about the workload and responsibilities.
One leader. Almost every successful business has someone who is the leader, providing the vision, and a “doer,” who ensures the company’s vision is executed. Both roles are crucial, but there needs to be just one who has the final say when partners disagree, or some clear way of otherwise resolving disagreements.
Complementary skills. Good business partnerships involve those whose skills complement each other. When skill sets are redundant, it is easier for a business partnership to fall apart.
Compatible personalities. Having compatible leadership styles and temperaments is essential to a lasting business partnership. If one partner excels at sales and marketing, there should be another partner whose strengths lie in finance. If you are considering a partnership with someone you don’t like to spend a lot of time with, you probably need to keep looking.
Respect others’ ideas and opinions. Partners will most certainly disagree at one time or another; the important thing is your ability to consider and respect your partner’s ideas and opinions, especially during heated discussions.
A complete, well-crafted partnership or operating agreement. Even compatible business partners who work well together have disagreements. A well-crafted operating agreement that identifies the partners’ roles, duties, and rights—and is clear about how to resolve disputes or a partner’s desire to move on—is critical. It removes ambiguity and uncertainty—and prevents anxiety—which goes a long way in helping the business run smoothly.
When you are facing any type of business dispute, you need an experienced Arizona trial attorney to obtain the best possible result. Contact Mestaz Law at (602) 806-2068 to speak with us about your case.