3 Vital Elements of A Successful Business Partnership

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Overview

There are many benefits to going into a partnership, you can leverage your:

  • skills
  • save time, money and effort when there is double the resources,
  • have someone to brainstorm, be innovative with and push through any potential challenges when the going gets tough.

Yet all too often business partnerships fail. 

For 10 years now we have worked with all sorts of businesses and have observed several common factors that attribute to partnership failures. The key factor that underpins most of them is that the partners get caught in what we call the the honeymoon phenomenon; the passion and excitement of a business opportunity and the adventure hooks them in and before anyone knows it, the business is off and away, but in many cases the proposed partners have overlooked several critical elements for starting a business together. This often results in serious conflict, poor communication and a lack of accountability and transparency, as well as financial and emotional turmoil. 

At The Breakfast Coach we are on a mission to ensure that you choose the best and the right business partner for you and take the time necessary to ensure you get to know your partner deeply, respectfully and in a safe and trusted manner so that you can begin with long term viability, profitability and longevity ensuring strategic business alignment right from the outset.  

Know The ‘Isms” When Your Backs Are Against The Wall

Entering a partnership without really getting to know someone at a micro level can leave both partners exposed. Having a beer/wine together a few times and maybe having a few lunches will highlight whether you like each other when the going is good BUT the true test of a person is when their back is against the wall and whether you can endure and tolerate behaviours that can only arise when your back is against the wall. When you truly understand what drives an individual to take the action that they take, to start, maintain and finish various responsibilities at the values and unconscious level you can begin to ascertain whether you will be comfortable in the short, medium and long term and dealing with this particular ‘type’ of person. We all have our ‘isms’ - the good, the bad and the ugly and when you can speak openly about this it gives both partners an opportunity to assess honestly whether they are willing to proceed or not. It’s not personal, it's business.  

Consider this…you are getting married, it's just a different kind of contract!

Entering into a business partnership is like a marriage, you have to choose very carefully because there is a lot at stake and you want the partnership and the business to last a lifetime or become a saleable asset. It’s a serious decision that can have dire:

  • financial
  • mental
  • emotional
  • physical consequences

such as

  • business failure and bankruptcy
  • mismanagement and fraudulent behaviour
  • unfair division of equity and assets and worst of all
  • silence between the partners which can then lead to protracted legalities.

Knowing each other’s strengths and weaknesses including communication, working and motivational styles assists with being able to talk the same language on all business matters. Again, it’s not so much for the good times although it helps, it is mostly for the challenging times when you are working through serious business challenges, and rest assured every business has them. Knowing strengths and weaknesses allows the business model to be developed consciously, negating a culture of blame, and for each partner to have certainty and clarity and know with a definite sense for the business direction where certain responsibilities and accountabilities lay. This makes for a great foundation to build upon.  

Lust for Business!

In our experience business partnerships generally start out with ‘passion, love and excitement’ for their service or product which is great because it can build serious momentum and is the beginning of a great recipe for success! Unfortunately though many skip adding certain essential ingredients to ensure that the meal is not just exceptional but replicable and sustainable for the long term, including setting up appropriate partnership agreements, exit strategies and equity splits. We leave those important details to the lawyers and the accountants to establish because they are the experts in this field. What we want to ensure is that:

  • potential business partners are positioned to make the best possible decisions taking into account all of the critical factors that make business relationships work which includes trust and a strong desire for the same business culture and outcomes.

This is not negotiable because it sets the tone for the overall business environment but too many businesses don’t do this work, and cannot agree on business priorities and so spend endless hours dealing with conflict and drama instead of both being on the same page from the outset. We ensure that:

  • all the possible risk factors and benefits associated with business culture and fit of joining forces is well identified and defined in advance of a partnership agreement
  • in the event of a mismatch it will be clearly identified and one of the proposed partners will usually identify it and seek to resolve it OR will make the informed decision to not proceed with next steps.

By investing in this work, in advance of starting your partnership, decisions are very clear, straightforward and easy because you already know in advance that you have a unique advantage for you business because you have a strong relationship already established with long term viability in mind and this positively impacts achieving your outcomes.