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Four Things You Should Do Before Getting Into a Business Partnership

Sometimes, partnerships are successful; sometimes, they end acrimoniously, with little more than a laboured, unproductive journey with a contrary partner to look back on. Colliding egos, communication gaps, and poorly crafted partnership treaties are some of the things that cause business relationships to unravel. Successful partnerships- that is, business relationships which help partners achieve more than they could have if they had struck out on their own- tend to avoid some of these factors, or face them head on when they appear on the horizon.

Making a partnership work comes down to carefully planning how you go forward with your intended partner (or partners), and executing that plan, that is, if you are sure you want to go ahead with them. Here are some things you should do before entering into a business partnership.

  1. Know Your Partner

You can be sure of one thing: not knowing enough about your would-be partner to begin a working relationship with him or her is a primer for a disastrous partnership experience. Even if you know them as friends, you should find out about their business capabilities. This should help you decide whether their working with you would contribute in the beneficial ways you envision for the partnership. Background checks should be done, to the extent that is possible and relevant to what you seek to ascertain about their abilities and character.

Social media profiles of potential partners on LinkedIn or Facebook should be looked at as well because they could hold clues about the sort of things they value. If you are not comfortable with what you see, then you probably shouldn’t be jumping into the business boat with them.

  1. Define the Nature of the Partnership

The partnership deed is crucial here. It is a document which details the obligations and rights of all partners, what they contribute to the venture and how dividends are allocated amongst them. In short, it is the law-and-order document for partnerships- or it should be. Not having a deed of partnership, or having one which doesn’t clearly define the roles of all partners opens the door for disputes. Mechanisms for dispute resolution should be put in place beforehand, and mediators decided upon as part of this.

  1. Sought Out Communication Issues

How do you remain on the same ‘wavelength’ with your partner?

Try to understand how your partners communicate and make it clear to them that you consider communication important; because it is. If communication is impeded or unclear, there is a high chance of misunderstandings occurring more often, and the partnership might suffer as a result.

Again, the partnership deed plays a role in this, as it could lay out procedures for individual actions on matters concerning the venture, including the rule restricting partners from taking action until other partners have been informed.

  1. Ascertain That You Share Similar Values and Vision for the Venture

Have frank discussions about the enterprise with your partners. Find out how they really view the whole project, what they want from it, and whether they have the intention of staying for the long haul. Watch for signs of a match or marked difference of opinion on things that matter to you, especially regarding how business should be done. Getting it right here is vital if you want to avoid intractable conflicts with partners going forward.

 

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Ikenna Nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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