How to form a lasting partnership

A partnership is based on two people who want to open up a business together. Partnerships do not require any legal documents so many times they are just an oral agreement between two people.

Here are some tips to form a lasting partnership.

Tip one:
Have the same vision. This is essential to form any kind of partnership, if you both agree on the same strategic direction of the company you will be far more likely to remain partners because both of you are working towards the same goal, rather than working towards two different goals. This is not to say that the two of you have to have the exact same ideas but you will want to talk about what your long-term and short-term goals are for the partnership before proceeding. For example if both of you want to be able to expand in the future you are both in agreement of that goal and the business will most likely succeed. But if one wants to expand and the other one wants to stay small then your partnership will most likely fail

Tip two:
Define your business roles. This is vital to having a successful business partnership because of you and your partner's different strengths and weaknesses. If you do not define your business roles you might find that both of you are working on the same thing and some of the other work is not getting done. What you need to do is to talk about what you guys think your strengths and weaknesses are and then divide up the roles between the two of you. For example if you have stronger leadership skills and are more of a people person then you should be doing customer service work and handling the employees. If your partner is stronger in business finance and marketing they can handle marketing the company and keeping track of all the income and expenses, as well as obtaining financing for the business.

Tip three:
Try to avoid the fifty-fifty spilt. This part might confuse you because the fair thing to do in a partnership is to split the ownership equally because after all both of you are equally responsible for the businesses debts, so you should both be equally responsible for everything else. But where this might come to be a problem is when trying to make big decisions in the future, so to help with the decision making process it might be better to spilt the company at forty-nine percent to fifty-one percent. The person who has the bigger share can then make the final decision, but then the problem comes up of if that is fair since the two of you are in it together. If this is the case you should consider forming an outside board that can help you make decisions when the two of you do not agree and compromising is not getting you anywhere.

Tip four:
Hold monthly or weekly partnership meetings. Any good relationship thrives on open communication and business partnerships are not any different. By meeting on a regular basis you are keeping the lines of communication open. During these meetings you should review your current roles and decide if anything needs to be changed, find out if anybody is unhappy and work on ways to fix any problems, and you can also provide constructive criticism to each other. But remember personal attacks are unhealthy in any lasting relationship.

Tip five:
Before you start your company you should create a partnership agreement. While partnerships do not need any legal documents and are more often created by oral agreements problems can develop further down the road. By creating a legal partnership agreement you can head off any of these problems before they get out of hand.