No one can build a company alone. Previously, we spelled out the importance of a strong leadership team to attract investors. The partners you choose will determine future successes, from raising capital to sustainably growing your company.
For many entrepreneurs, maintaining strong business partnerships is the key factor to their success. But how can you ensure you and your partners will work well together? Here are seven tips for finding and developing successful business partnerships.
1. Ensure business alignment
Business partnerships often don’t work out simply because partners have competing visions of what success looks like. So before agreeing to partner with others, first make sure all parties involved define in detail what success means for them.
Once all partners align on their visions and goals, it becomes possible to leverage each others’ strengths and establish a foundation of trust on which to build a company, says getAbstract CEO Michel Koopman.
2. Involve all partners in business planning
Before starting a business, you want to vet your potential partners as thoroughly as possible to determine if you will work well together. A good way to do this is to work together on writing a business plan. By collaborating on crafting objectives such as your mission statement, marketing strategy and revenue goals, you can get a good sense of whether a business partnership will be mutually beneficial, Koopman says.
It’s better to know during the planning phase that a partnership will not work out. Also, by working together on the business plan, you can continue to build trust and ensure your objectives align with everyone’s vision of success.
3. Understand all commitments
Ideally, all business partners would commit 100 percent of their energy to starting a new company. However, that is rarely realistic. People will need to keep working at other jobs to make an income and want time to spend with family.
Thus, make sure you and your partners have a complete understanding of the amount of time you can each spend launching a new venture, says Murphy. By understanding each other’s commitments you can avoid any perceived imbalances in workload or responsibilities.
4. Choose who the visionary leader is
While every partner is critical to the success of a business, the best business partnerships recognize that only one partner can lead the charge on the company’s vision. According to Inc. journalist Bill Murphy Jr., in almost every successful business partnership he’s studied, there’s usually one visionary leader and one who excels at execution. “I call them the Big Idea Person and the Get Stuff Done Person,” he says.
Neither role can succeed without the other. However, one partner has to have the final say when partners disagree in order to move the company forward.
5. Have complementary skills
Understand up front the key skills each partner brings to the partnership. Effective business partnerships involve people with indispensable abilities that complement each other. An honest assessment of skill sets will also help determine which partner best fits the role of leader.
A company can still achieve success if all partners have similar skills. However, it means you’ll most likely need to spend valuable resources and hire outside help to make up for shortcomings, Murphy says. Also, if one partner brings a redundant skill set, it becomes much easier for a business partnership to dissolve.
6. Have compatible personalities
For many, their business partnerships are the longest relationships of their lives. They’re able to work well together for so long because they have compatible leadership styles and temperaments. Good relationships are complicated and take work, so it’s important you understand your potential partners as people.
Murphy recommends you think through as many personality facets as possible. Who is the dreamer and who is detail oriented? Who likes to wake up late and work until 3 a.m., and who is the morning person who can handle pre-sunrise conference calls in other time zones? Who is good with numbers and who has the charisma and sales ability?
7. Respect your partner’s opinions and ideas during disagreements
Once you’ve decided on a business partnership, you must tend to it continually. Open communication is the best way to keep these relationships strong, writes Business Insider Associate Editor Melissa Stanger. This includes the freedom and opportunity to discuss differences of opinion.
Good business partnerships understand that disagreements are necessary — they’re part of the “creative friction” that leads to rewarding decision-making. However, during heated discussions, sometimes it’s easy to become dismissive of your partners. But the better you can respect and support your partners’ talents, ideas and opinions as a valid and essential part of working together, the more fruitful the relationship will be.
Remember, investors most likely care more about the strength of your business partnerships than the strength of your business ideas. Once you’ve found the people you want to work with, contact an UpCounsel contracts and business agreements attorney to set up the foundation for productive and successful business relationships.