12 Tips on How to Create a Successful Business Partnership

Forming a business partnership may seem simple enough, but keeping the partnership not only together, but working smoothly is paramount to success. Here, we present 12 tips on creating a successful business partnership.

12. Business Partnerships: The Foundation of Success

In many ways, a business partnership is comparable to a marriage. Both unions necessitate hard work, listening, and excellent communication to make them work. There are both low moments and high moments, and agreements and disagreements. However, success is defined much differently in a marriage than it is in a business partnership. Business partnerships focus on the company’s welfare and wellbeing, and when the business is profitable and growing, it usually has something to do with the strength of the partnership behind it.

Although we will bid goodbye to the marriage analogy, business partnerships are predicated on strong relationships. Partners who respect each other, communicate well and share common goals usually form businesses that achieve a level of success. In order to help entrepreneurs and business owners understand the critical elements of an excellent partnership, we offer these suggestions and tips. Perhaps not all of these will apply to your current affiliation or business, but there is a lot to learn about what makes successful partnerships work and what traits good partners have. We hope you incorporate these ideas into your business acumen.

11. Partners Should Practice Mutual Respect

It should go without saying that business partners must respect each other, but these days, it bears repeating. This fundamental aspect of any partnership is essential. Without respect, most partnerships will quickly fail. Notice that we are not asking partners to like each other, though that can be helpful. Partners can be very different individuals who are simply not cut from the same cloth, and partners do not need to be friendly. However, they must have a strong sense of respect for each other since this will translate to listening to each other’s ideas and hearing out each opinion.

Even if business partners are not friends, they must be able to quickly put their differences on hold and work together for their common goal: the success of the company. Therefore, if each partner is respectful to each other and loyal to the business, you may just have a winning combination.

10. Business Partners Must Share Motivating Factors

When successful entrepreneurs start their businesses, they are united by courage and ambition, and passion. The key here is to ensure that partnerships also feature the same excitement, enthusiasm, and entrepreneurial spirit that small business owners often bring to the table. Business partners who have similar mindsets and who are similarly captured by their unique ideas and goals for success will work off of one another well. When two entrepreneurs partner up and take their talents into the small business world together, they will undoubtedly face challenges. However, if they are both driven to succeed in the same all-encompassing way, they have a much better chance of it. On the flip side, if one business partner is all-in, and the other harbors doubts or just does not feel optimistic about the business or ambitious enough, that is a recipe for business disaster.

9. Partners Should Possess Unique Complimentary Skills

While sharing a positive, ambitious outlook is helpful, partners do not necessarily have to possess the same set of business skills. In fact, when partners have different skill sets but they match up and complement each other, the outcome can be beneficial for both parties. The combination of unique skills, if they work together, can actually create a practical synthesis, meaning that the combination of the parts is even more significant than the partner’s individual talents.

For example, perhaps one partner in a restaurant is the “front of the house.” He is a talented manager with great customer service skills. His partner, however, likes to work in the office, and she is a pro at crunching numbers and estimating revenue and costs. This “business synthesis” would elevate the operation. The combination of skills would lead to an efficiently run business, and perhaps the two partners could even learn from each other, leading to a stronger company in the future.

When forming a partnership, look for not only an individual whom you get along with but someone whom you admire for being proficient in different areas than yourself.

8. Excellent Partners Support Each Other Unconditionally

All human beings have strengths and weaknesses—this goes without saying. Likewise, all entrepreneurs, business owners, and prospective business partners have talents and shortcomings. A lack of knowledge in one area of business or a lack of instinct or talent in another can harm the growth and overall health of a business. However, there is a unique opportunity here for partnerships that do not exist for, say, a sole proprietorship. Adept business partners support each other when it is needed and trust each other enough to point out weaknesses. When there is trust and support in the relationship, it is easier to not only acknowledge poor decisions or mistakes but learn from them and move through them. Supportive, understanding business partners complement each other and turn weaknesses into strengths.

7. Communication is King: Business Partners Have to Talk

Within a business partnership, the ability to communicate is genuinely essential. Remember the marriage analogy? We hear all the time about how important communication is within the parameters of a healthy marriage, and that is true. However, good dialogue and even better listening are just as crucial to a business partnership. While it is true that partners do not need to discuss profound issues each day they are in the office, they should be in the habit of being open about current challenges, successes, concerns, and future goals. For example, if one partner is set on terminating the partnership and business in five years, regardless of profits, and the other partner is in the dark about that prospect, then we have a problem.

Open communication will usually strengthen a partnership, and when it does harm, it is because one or both partners have been hiding things.

We do not live in a utopia or an ideal world, and we all have bad days and different opinions. Therefore, partnerships are generally no stranger to friction and disagreements. The key here is that communication makes these issues easier to work through, and without quality dialogue, small discrepancies can rapidly ruin a business. Here is a clear hint for all current and prospective business partners: try to communicate as clearly and as often as possible.

One last point here because communication is so indispensable. In partnerships, each person will depend on the other form of information, so if one party struggles to communicate, the other partner will suffer. In successful partnerships, partners quickly learn that constant and concise communication is paramount and that it is better to overcommunicate than to lapse into silence. Reliability and trust go hand in hand with communication and dialogue, and you can take that to the bank!

6. Efficient Partnerships Have Clearly Defined Roles

When a business partnership is clicking on all cylinders, you will find that each person is using their unique skill set to their advantage. If both partners are playing the exact same role, then there will be useless overlap. However, if both partners find a position that suits their strengths, alchemy will be achieved, and company goals will continue to be met. Going along with this, partners should be aware of their weaknesses and continue to work on these so they become more well-rounded in and out of the office.

What is crucial to remember here is that these roles need to be clearly agreed upon early in the life of the business and accepted by both partners. Dissatisfaction and even resentment can grow and fester if this is not true. For example, if the partner who is the “face of the business” really struggles with so much time spent on the phone taking orders, he or she needs to communicate this immediately. Also, transparency is also vital here. Both partners should be aware of the company’s successes and failures so that they both feel the same amount of both satisfaction and stress. Finally, when roles are shared, the workload must be shared as well. This can grow a little murky when both partners have clearly defined but different parts. For example, one partner may finish his or her tasks at 6 pm and want to head home, but if the other partner is still working, the best thing to do is to try to help finish the day’s work off before leaving and then make sure to figure out if the workload must be adjusted. So, set clear roles and goals from the start for both partners, and then stay flexible as the company hits its stride.

5. Business Partners Should Continue to Set Shared Goals

Usually, partnerships are formed because both partners have goals they want to achieve in the corporate sector. Once the business is formed, the partners pursue their mutual goals and ideally achieve them. So, what comes next?

New goals should be pinned up on the board as soon as old objectives are met. Even small goals, such as finding one or two new clients or customers per week or month, can push the partners—and the company—to continually achieve. There is no place for sitting on one’s laurels in business, and successful partnerships frequently set and achieve goals. We recommend having two categories of goals. The first should be for more minor, day-to-day achievements. The second category should address larger, more significant objectives and aims, such as growing the business or expanding the company’s reach.

Goals and specific objectives keep us moving, and when partners are on the same page with common goals, it makes it easier to succeed.

4. Excellent Business Partners are Accessible

We’ve focused a great deal here on the individual partners who make up a business partnership, and they are an essential focal point. But many partnerships are also made up of additional team members who help out with everything from accounting to website updating to day-to-day tasks. Building a partnership that lasts is about more than signing a quick deal or shaking hands with your business partner. So, how do you show the entire team that you are interested in what they do and thankful?

The best thing an entrepreneur can do in this case is to touch base or even sit down with every individual in every department that helps contribute to the partnership. Now, if your company is small and starting out, this might not take very long, and if you have a larger corporation, you can extend this over a period of weeks. But showing not only your partner but everyone involved that you are thankful for their efforts is essential. If there are problems or questions, do your best to find answers. The key here is to understand how a new business venture impacts everyone in the company and make sure everyone is on the same page, from the intern to the CEO. Therefore, great business partners are available not only to each other but to everyone in the company.

Also, do not be afraid to thank your partner and everyone involved in the business. A simple “thank you” goes a long way.

3. Business Partners Must Remain Flexible

As many of us have experienced, not everything goes according to plan in our business ventures. Part of the journey of an entrepreneur is taking risks, and sometimes those risks do not pan out. On the flip side, sometimes a misevaluation or a mistake leads to a new idea, deal, or even a new company. The key here is that while goals are essential, it is also important to stay flexible. Business partners need to be flexible with outcomes and also with each other. Especially when starting a new company, one should be ready for anything.

This way, when an unexpected situation arises between partners, or one partner surprises the other with a curveball, the individuals are prepared. It makes sense to have the entire team ready to deal with adversity and chart a new path if necessary. Business partners should trust each other to always be looking at different and unique options, so if Deal A doesn’t work out, they can turn to Deal B or Deal C.

The point here is that having a backup plan or two does not mean that you are not confident. It means that you are smart and prepared for the unexpected. Also, successful outcomes can surprise us in business and come when we least expect them. So stay open, stay grounded, and stay prepared.

2. Business Partnerships Should be Mutually Beneficial

When business partners seek to take an active interest in each other, a mutually beneficial partnership develops. If an individual cares about business outcomes and the health, wellbeing, and prosperity of their partner, then success will surely follow. From the commitment of time to the investment of money, if one partner is doing more than the other, then the balance of the partnership will be flawed.

When a business partnership is struggling, it is often because this sense of balance is off. One partner feels they are giving more time, money, or overall commitment than the other. If this is the case, the business partners need to communicate. Dialogue is the only way to overcome a roadblock such as this.

On the other hand, when a partnership is really in a flow-state, both partners and their abilities can add up to more than the sum of the partnership’s parts. That is the goal of a business partnership, and when it is achieved, robust gains will be made.

1. Great Partnerships Are Powerful Business Tools

In our world, partnerships can be found everywhere. We have law partners, business partners, and even romantic partners. However, there is a reason that individuals team up: if the team is balanced, respectful, and focused on mutual goals, there is a unique combination of strengths to be found.

When partnerships fail, it is because of a lack of communication. When business partners decide to call it quits, they usually do not fully commit to the team aesthetic. Perhaps there is a lack of respect, focus, or faith in each other. Not every partnership is meant to last or destined for success.

So, choose your business partner carefully, and engage in honest dialogue early. Make sure to be clear about your individual and mutual goals, and find the overlapping themes. When business partners regard each other as equals, respect each other’s roles and talents, and seek success above all else, they find success. They also learn that excellent business partnerships are powerful business tools.

Good luck with your business goals and creating a successful business partnership. For questions and legal help in getting your new collaboration off the ground, the skilled, licensed attorneys at Nakase Wade have answers. Call us today for a free consultation regarding registering your new partnership, obtaining licenses, or signing contracts.