Secrets to a Successful Business Partnership Revealed
Next to marriage, a business partnership is the most intense and collaborative-dependent and interdependent relationship you can have. And just like marriage, establishing the partnership is just the first step. Building a sustainable, thriving business relationship takes work, patience and commitment.
The reality is that with business partnerships there is a sky-high failure rate; more than 50% of them fail. That’s a staggering statistic. On the other hand, 50% of them succeed, and that is what we are going to focus on in this article.
There are many moving parts in a partnership. You and your partner or partners joined forces for any number of reasons. Could be you didn’t want to build a business by yourself or you wanted others who have complementary talents and strengths so that you could enhance the business. Maybe you wanted to grow, and through mergers/acquisitions or adding new partners you thought you could expand the business, increase revenues and profits and maybe, just maybe, work a little less. There could be one or many reasons you decided to form a partnership.
The moving parts are not unlike any other business. You have people involved and that means there will be differences of opinions and views. What’s unique about a business partnership is that each of the partners, to some extent has a real voice in the decisions that get made, and as is the case with people, we tend to focus on our needs first and the partnership needs second. So knowing all this, what are the secrets to a successful partnership?
First and foremost it’s always about communication. Communication is a two-way street. That means that in order for communication to be successful we have to listen to the other person, and I mean really listen, not listen so they can complete their sentence and we jump in. We have to listen with the intent to understand and for many, in fact most of us, that’s difficult, even when we think we do. There is so much about communication that I can’t cover in this article, but know at the core of everything that works and everything that doesn’t in our lives is about communication.
In my book, Finding the Fork in the Road, I use a quote that I love that expresses exactly the challenge of communication.
Between what I think I want to say, what I believe I am saying, what I say, what you want to hear, what you believe you understand, and what you actually understood, there are at least nine possibilities for misunderstanding. ~Francois Garagnon
Communication starts even before you decide to join forces. There needs to be discussion on values, goals, vision, and make sure you are in alignment. Make sure you discuss topics such as how will you make decisions if you aren’t in agreement. Who gets to be the leader? What roles will the other partner(s) have and does this line up with the strengths and skills of the individuals as well as their desires? You might think that talking about work ethics and styles is unimportant, but trust me, at some point in the relationship it will be, and might become a big problem. Have the conversation about money. Not simply about how much everyone is going to get paid, but your feelings about money and how it’s spent. When someone want to have a big, fancy office, or company cars or stay in 5-star hotels and others don’t, it’s guaranteed to cause a fight somewhere along the way.
The point is before you agree to become business partners, have the conversation about everything and anything. Don’t assume you and they see the world the same way. Before you get married is the time to work through differences and decisions, not after signing on the dotted line.
And put everything in writing. There are two documents I would encourage you to create. The first is the legal partnership agreement outlining the investment of each partner, shares and ownership, and all the other legalese an attorney can advise you to put into the document. I also suggest you create an operational document which spells out some considerations that aren’t in the partnership agreement. This could include how decisions get made if you aren’t in agreement, roles for each partner and the expectations of each partner (revenue generation or whatever else is expected)…basically anything you discussed and have agreed to before creating the document.
Here are some more secrets to a successful partnership.
- Commitment — to each other, to yourself and the role you hold, to the business and to the partnership.
- Trust — between each other is imperative for long-term success.
- Measuring progress of the business, the partnership and the roles of each partner on a regular basis, and having the necessary conversations related to progress.
- Willingness to handle change as a unit. Change is going to happen, handling as a unit is a path that safeguards against disagreement and discord.
- Focusing on the success of the business is more important than any individual’s needs.
- Your relationship is your greatest asset, invest accordingly.
- Regular and effective communication. Not when things go wrong…all the time.
- Take responsibility for your actions.
- Remember the problem is not the problem, it’s how we deal with the problem that influences the outcome.
- Define big versus small problem. Often the small problems overshadow the big ones and become the bone of contention.
- Shared vision, values and goals. It’s the foundation of a successful partnership.
- Revisiting vision, values and goals on a routine basis. If something has changed you must discuss it and determine how to handle.
- How you deal with conflict needs to be compatible. It’s inevitable that conflict will occur, knowing you and your partner(s) can work through it successfully builds trust and eases the path towards success.
- Finally, a sense of humor is vital. Being able to laugh together, laugh at situations and even problems, laugh and celebrate success together will bring you closer, and make the conversations easier.
If there is one underlying secret to success in a business partnership it’s around communication. What makes any relationship great is the willingness to communicate about everything, and anything. It’s having the difficult conversations, together, because you have to sometimes slug through things. Celebrate as well, even if the celebration is around working through a problem, disagreement or challenge. Keep talking and sharing. It’s what will keep your partnership on the road to success.
Are you battling with your business partners on company direction, roles, decision making, and just about everything else? Not sure if it can get better? Schedule a complimentary thirty-minute call with Linda to discuss your unique situation and discover if you could benefit from partnership coaching.