The Ultimate Alliance - Building Better Business Partnerships

Partnerships are rarely easy and even less so in business. It is true that it is difficult to have too many chiefs and not enough Indians. Many friends set up 'shop' together hoping for a wonderful adventure together. Sometimes even company documents are formed. One thing that is often overlooked though is something as simple as a Partnership Agreement. As this is a legally binding document it is recommended you seek an entrepreneurially focused lawyer, to not only assist you to create the document in agreement with your business partner/s, but also to determine whether filing the agreement is recommended for your spefic circumstances. The lawyer can direct you as to what matters should be addressed in the agreement, but you can gain some direction by searching partnership agreements online. Preparing as much of the information prior to your meeting can possibly save you some costs.

This particular agreement, if well thought out and signed by all parties accordingly, can help to lay out a summary of what the agreed dreams and aspirations of each partner are and how to achieve it together. Equally important is the details of what is expected from each other, like who will clean the office/store, how often, when and what happens if the nominated person at the nominated time cannot attend to the relevant expectations. That is: what is the backup plan. Yes, the little things count and the devil is in the detail. Of course nobody can plan for everything, but the more that can be planned out the better. This includes how many hours and when each person will participate, which holidays will apply, who will sign legal and financial documents. These are the not so little things. What is also a matter of reference is how often this agreement will be reviewed and under what circumstances or agreement level will it be changed. This can be as informal as you like or as detailed as you like, but at the end of the day, it has to be workable and feasible for all involved. The less there is to questijon as progression occurs, then hopefully the less debate will occur between the leadership and friendships can be maintained and businesses saved from breaking down from unnecessary disagreements, often created from parties not being on the same page to begin with, as clarity wasn't sort when it should have been.

Being a leader is a whole new concept to some. Many just have leadership thrust upon them, by choice and surprise, others have been in the top job for years. Different industry and dynamics require a flexible approach. When there are several leaders managing together or even different areas, leadership styles can clash from time to time. How to manage the accounts, who to employ and when, which marketing is most applicable, what technology to utilise, and so on. The details which are not covered can be the cause of most concern should matters not work to plan for all involved. This can involve disruption to the business, disconnection with friendships, and worse case scenario litigation can eventuate. To enable best outcomes a small investment can set out these few procedures and help with smooth sailing ahead.

Especially, when the partners are couples or friends, it can work well for a period, but over time people can have a tendency to grow and develop differences of opinions and goals to the originally planned ones, no matter how much is laid out in writing. This can be the cause of great distress if neither party is willing to compromise. Including an exit clause in the Partnership Agreement can offset any need for future concern. The exit clause should not just allow for differences of opinions and when to insist on a person leaving the partnership, but under what circumstances, plus what compensation they will be entitled to or not. Like taxes, death is also a fact of life and planning for what happens to the business of any of the partner's investment is only going to save a whole lot of difficulty at a later time should such a loss occur. If company documents have also been prepared then the two should sync regarding this issue.

Business is not meant to be easy, otherwise everyone would be doing it, but it certainly can be easier by following a few basic steps in planning, preferably earlier rather than later.