By YEC
For a partnership to blossom, you need to discuss your long-term vision from the start.
Creating a new business idea is exciting, and it can be even more exciting when you have a business partner by your side. However, for a partnership to thrive, it is important to discuss the day-to-day operations and long-term vision for the company from the outset.
From taking the time to set collective goals to establishing trust, 8 Council for Young Entrepreneurs members share the first steps new business partners need to take when starting a business. Follow their advice to ensure success for yourself and your business partner, both now and in the long term.
What step should both parties take first for a new business partnership to be successful, and why?
Contents
- 1 1. Drafting a co-ownership agreement
- 2 2. Practice being a good partner
- 3 3. Identify Your Strengths and Weaknesses
- 4 4. Discuss Your Long-Term Goals
- 5 5. Talk about money beforehand
- 6 6. Clearly define roles and responsibilities
- 7 7. Align Your Expectations and Key Success Indicators
- 8 8. Get to know your conversation partner well
1. Drafting a co-ownership agreement
You should draft a co-ownership agreement to clarify how decisions are made, how profits are divided, and what happens if someone leaves the company. It’s usually rainbows and sunshine when a new business partnership begins, but it’s smart to have a legal game plan, especially if things go wrong. As the old saying goes, “Hope for the best, but plan for the worst.” —Dug Bend, Bend Law Group, PC
2. Practice being a good partner
It is usually difficult for new entrepreneurs to understand that a partnership is about giving, helping and uniting around common goals. Try being a partner to someone else before looking for a partner for your business. A true partnership in business is about getting through tough times. Imagine different situations you could find yourself in and how you would act. —Dmitri Satuchin, DO OK
3. Identify Your Strengths and Weaknesses
The key to building a successful business partnership is identifying your strengths and weaknesses. If you and your partner both have the same weaknesses, you both deserve to know that up front. For example, if you both excel at marketing but have poor public speaking skills, it can cause problems when it comes time to promote your next product or boost your brand awareness on a podcast. —Chris Christoff, MonsterInsights
4. Discuss Your Long-Term Goals
One of the first steps to building a successful partnership is evaluating where each partner is in their career path. If one partner is nearing retirement and the other is just starting out, their goals will be very different. It doesn’t mean it won’t work, but knowing where each partner is with their long-term business goals is key to building a partnership based on integrity. —Jared Weitz, United Capital Source Inc.
5. Talk about money beforehand
Talk about the money part before you start. It may be tempting to skip talking about money and start a business with your friend, but finance is a matter that can lead to serious conflict. Make sure you speak things up before you start and have everything documented. That way, you’re both on the same page when you’re talking about your share of the profits. —Josh Kohlbach, Wholesale Suite
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6. Clearly define roles and responsibilities
Both parties must clearly define each other’s roles and responsibilities. Doing what it takes right now may work for the short term, but it won’t work for long. Defining roles and responsibilities eliminates opportunities for disagreement by giving each partner control over their domains. Employees and customers can also benefit if they know which partner arranges which aspects of the business. —Stephanie Wells, Formidable shapes
7. Align Your Expectations and Key Success Indicators
Both parties should clearly state their expectations of the partnership and the key success indicators that are important to them. When expectations are aligned, both parties better understand what the other is trying to get out of the partnership. When the key indicators of success are outlined, both parties know what they are trying to influence, which better guides their decision-making. —Akshar Bonu, The custom move
8. Get to know your conversation partner well
Before entering into a partnership or negotiation, it is important to make sure that your counterparty is trustworthy and can keep its promises. Vetting someone can help ensure you don’t waste time, effort and resources when it’s not worth it. Getting to know someone can take time, but it’s crucial, especially if you’re aiming for a long-term relationship. —Brian Pallas, Opportunity Network
About the author
Young Entrepreneurs Council (YEC) is an invite-only organization made up of the world’s most successful young entrepreneurs.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.