Strategic business partnerships are well thought out alliances. Every aspect is evaluated to ensure the success of the business.
The right partner will add dividends year after year. Choosing the wrong partner can land you among the 50% of businesses that don’t make it past their fifth year.
Creating a partnership for longevity requires essential ingredients. Keep reading to discover what those are.
One reason that partnerships fail is lack of compatibility. The people involved have clashing personalities. This doesn’t mean personalities can’t be bold or overly optimistic. Confidence and positivity are essential traits of the most successful business people.
It’s just necessary that each partner can work with the other in a constructive manner.
If you don’t know your potential partner well, interview them like an employee. Ask about their prior experiences as a partner. If possible, reach out to previous employers and partners. Ask detailed questions about work ethic and problem-solving.
It is not always a good idea to go with someone you know. Everyone has heard of the ill-fated best friend-turned-roommate situations. We can often look past the traits of our friends and relatives that aren’t so great.
Sometimes those friendships, or marriages, work best outside the constraints of business.
Personal and Business Ethics
A personal code of ethics will affect the entire organization. The illegal activities of companies like Enron all started with a simple lapse in ethics. Use references to get a better understanding of your potential partner’s ethics.
Even if an activity is not potentially illegal, you may be uncomfortable. Any discomfort around business practices will add distress to the in the future.
In addition to personal ethics, you want to determine their work ethic. Many partnerships fail because one commits more effort than the other. This leaves the other feeling taken advantage of.
If deciding on a business, read through client reviews thoroughly. Contact them if possible.
Discussing the future of your business will save you money down the road. What are your goals for the business? Knowing where you want to go is essential to getting there. Your partner should have realistic expectations of what it takes to grow a business.
Their goals should fall in line with the mission of your business and complement it. One partner may want a business they can work on on the weekends that generates a side income. The other may have ambitious views of making the Fortune 500 lists.
This kind of disparity exists in strategic business alliances also. Choose a business to support your current load. Outsourcing is a good example of a business partnership. You want to know that they can actually help you with your goals.
Each member of a partnership succeeds in direct proportion to the others. Put another way, the actions of one affects everyone else. This makes communication essential to a successful business.
Unethical practices have a way of resurfacing. Do your homework on your potential partners. A partner you can build trust with is a partner you can build a business with.
This also applies when partnering with another business. When you choose to outsource an essential part of your business, you place part of your fate in their hands. Some companies chose to outsource areas that are not their expertise. Accounting, HR, and Information Technology are common choices.
Outsourcing IT with companies like Charlotte IT Solutions, for example, could save you a lot of money. But if the IT business you choose isn’t the right fit, you could lose more than you save.
Ask yourself why you’re seeking a partner in the first place. What is it that you are hoping a partner can bring to your business that you couldn’t accomplish on your own? This bit of info can help you wade through candidates.
One thing to make sure of is that they have a history of execution. You can have meetings every day about strategy without ever getting anything done.
You and your partner will have different roles in your company. If you are a startup, chances are you don’t have enough money for lots of employees. What value can a partner add to your business? What value can you bring to them?
Sometimes partners are purely financial and you run the business on your own. In other cases, partners offer their industry connections, education, or clients.
Building a working partnership can take years. You have to work out the nuances of the other’s character and really decide what works best for the company. Establish a contract that determines what each member is entitled to.
A good contract should outline business roles and ownership. It protects you in case the business or the partnership fails.
Creating a Partnership that Lasts
Creating a partnership that fulfills the needs of every member and also benefits the business takes time. Life and business involve conflicts. How you get through those conflicts will determine your overall success.
Choose a partner that you can rely on. Don’t be afraid to communicate problems that come up in the business. Avoiding conflict will lead to lack of trust between partners.
Even though it may seem awesome, your best friend or spouse may not be the best fit for your business. Spending 24hrs a day with a person can strain any relationship. Also, we have a tendency to downplay our loved one’s shortcomings.
Do your homework up front to avoid a fractured partnership one, five, or ten years down the line.
To discover common business pitfalls and how to avoid them, click here.