Creating Partnerships for Business Growth

When crafting a business partnership, it’s important to take a number of things into consideration, especially if a partnership is expected to stand the test of time. Business partnerships are established for many reasons, but of course when going into business with someone, it’s important to trust them. Trust can be a hard thing to develop, but a partnership isn’t much of a partnership without a degree of trust.

When forming a partnership, both parties should spell out exactly what their expectations are and what they’re contributing, and more importantly get all of that in writing on a legally binding partnership agreement. This way if either party steps out of line, they can hold each other accountable.

Mutual respect can also have a profound effect on a partnership, and without it, both parties may as well go their separate ways. Acknowledging contributions, large and small, and respecting the dynamics of a partner can mean the difference between success and failure. One party shouldn’t have an issue with the other so long as things are getting done and the partnership agreement isn’t being violated.

Much like people, different companies have different ways of handling things and each party should respect and come to value these differences. In the long run these differences shouldn’t matter as both partners should have already established a shared vision and system of values. Things like this drive partnerships to reach goals, but if either has a different goal in mind, problems may arise. Obviously, the only way around any of these issues is honest and open communication.

Much like marriages, business partnerships must be nursed with conversation and healthy debate, no matter what the topic. This sort of communication should include everything from money management to the mistakes a party has made, if applicable. In business, it’s important to develop a thick skin and view things objectively. After all, it’s just business and criticism can play a pivotal role in improving the nature of one’s business. Something like criticism has to be “give and take,” or else communication breaks down, and everyone gradually comes to loathe one another.

The benefits of a sound partnership far outweigh the disadvantages, but it should be noted that in some cases, partnerships aren’t for everyone or even every business. The biggest disadvantage for any partnership is the fact that each party is liable for the other and must take into account the doings and happenings of one another. Due to this, some experts suggest incorporating your business into a limited liability company (LLC) rather than structuring it as a partnership. Such incorporation can protect personal assets if either party gets sued. Any such asset that contributes to the partnership is owned by all partners, and there’s guarantee (unless legally bound) where any asset will go should the partnership dissolve. To draw another marriage comparison, both parties should have in mind exactly what they are hoping to gain from their partnership and be prepared to go their separate ways should things go south.

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