The Synergy Merchants Blog has often suggested forming a new partnership as an advertising method. When you partner up with another business owner from a different industry, you afford your brand the opportunity to get advertising in exchange for doing the same.
But what about forming an all-new business with someone? That’s an entirely different type of partnership. It’s not one that is easy to pull off successfully. What steps should be taken to make a new business partnership work?
Have a successful history together.
Ideally, your business partner won’t be someone you’re completely brand new to. It’s beneficial to have some sort of history together. Have you teamed up for work on a joint project? Did you attend the same trade shows and conferences? Do you work with the same manufacturers and suppliers? Some commonalities and some unified experience will help to make your future as partners in business work.
According to Bill Murphy Jr. on Inc.com, having a history is the most important element of a successful business partnership. “Great business partners almost always have had a prior history of working with each other,” he insists, “If you think you’ve found a promising person to pair up with but you don’t have that kind of history (then) work on small projects together, or at the very least, spend a lot of time together before you agree to do anything.”
Sign a written partnership agreement.
Put it in writing. It’s as simple as that. You don’t want to forge ahead with any business agreement without a written contract. It’s vital to determine the roles and responsibilities of each partner. It’s also important to hash out the splits involved in the unfortunate event of the business shutting down. As Brad Sugars insists on Entrepreneur.com, every detail and obligation must be clearly defined, written out and agreed upon by all parties.
“This is best done with a written legal agreement drafted by a well-qualified, mutually agreed-upon lawyer,” he confirms, “Just make sure the attorney is well-versed in business partnerships, and be sure to keep her card handy at all times. You may need that person again when things go wrong.”
Be able to have tough talks about money.
Unquestionably, discussions about money are tough. Disputes over finances often lead to the breakup of relationships. Don’t let this happen to your joint venture. Be able to speak about money candidly. This includes the respective incomes that both of you are expected to receive and who may be responsible for funding production and/or advertising efforts.
“It’s tempting when you start a new venture to skip some of the tough conversations,” admits Murphy, “You’re excited about the idea, and frankly you don’t know whether you’re starting the equivalent of Facebook or Friendster, so it can even seem counterproductive to get hung up on money. Some founders dodge the whole thing by just saying they’ll split their equity, 50-50. That can be a recipe for disaster.”
Are you considering partnering up with another business, but are concerned about the costs that may be involved? Contact Synergy Merchants to find out how our unique merchant cash advance program can help you. Call us at 1-877-718-2026 or email us at firstname.lastname@example.org. You can also apply online for a free, no obligation quote!