Virtually everyone has been in involved in personal partnerships through dating or marriage. Far fewer have been involved in professional partnerships such as business co-owners.
It's worth mentioning that the failure rate of personal partnerships exceeds fifty percent. We don't have hard data on the failure rate of professional partnerships, however we suspect it is every bit as high as that of personal partnerships.
Actually when you think about it, wouldn't it make more sense for professional partnerships to have a higher failure rate? Don't personal partnerships have a stronger motivation for success than do business partnerships?
In business partnerships the main motivator is wealth generation, although many others factors play into the quality of the relationship. Obviously in personal relationship it is a hodgepodge of emotions and benefits that may include companionship, religion, money, love and children. And if it so happens that your personal partner is also your business partner, it can all get very complicated.
This article is written for those of you who are either in or considering a business partnership. I am going to share seven tips that will help you create a winning partnership.
Over the last several years I have helped partnerships smooth over the rough patches. Along the way I realized that these seven tips consistently made life better for those involved.
TIP ONE: Accept that the work is not always divided equally, even in fifty-fifty partnerships.
One common theme in partnerships that are not working revolves around what the other partner(s) are not doing and what the complaining party does more of. Often this jealousy revolves around the investment of money and time or the distribution of profits. I have listed some partnership toolbox tips to help you in your business relationship.
It is not productive to sit around and spend your time mulling over all the ways a partnership seems unfair to you. I assure you this will be a frustrating and non-productive exercise. Instead think about what you can contribute to the partnership.
There will be times when one person works harder than the other. Isn't one reason to be in a partnership to support each other? If you read one of my recent Blog posts it is a thank you to my partner Ron who has written eighty-five consecutive newsletters. Even though I believe he is a better writer than I (as you are about to discover), it wouldn't be fair if Ron was the only one burdened with the task of coming up with new topics and writing newsletters in a short time-line. Hopefully, you will enjoy my newsletters on his rest weeks. The point is that we support each other.
TIP TWO: Decide what strengths you bring to the partnership and what you can do improve the endeavor as a whole.
Before Ron and I decided to be business partners we had many conversations with each other and within ourselves. Truthfully neither one of us was considering a partnership. However, all those meetings pointed out that our styles mesh well and, after much discussion, we discovered that our "contractor solutions" were nearly identical in context and priority.
Ron and I do not have a formal agreement. Eventually we will have one but today we have something much more important. Open, honest communication! Yes we agree on most things but not everything. How we disagree and have give and take is important. We try to never get bogged down by the little stuff. We know this endeavor is not about either one of us but rather the team that we build.
TIP THREE: Always have open and honest dialogue!
Ron and I also have a tremendous amount of respect for each other. Sometimes lack of mutual respect diminishes partnerships over time. If it has, you can work to bring mutual respect back. I suggest all partners make time to create a set of core values that everyone in the organization can believe in. And it starts with the partners setting the example. Establishing these core values is the first step in repairing respect between parties.
I think I can speak for both of us that our partnership will last a long time. We are at different positions in our careers, but our partnership goals are aligned.
How did we accomplish this?
Again through many interesting and exploratory conversations. We cherish these conversations. Although we don't always initially agree, one of us ends up making the most sense and the other, grins, nods his head and waves the white flag.
You see, we never approach things from a who is right or wrong perspective but rather from what works best for our client viewpoint. I have never experienced either one of us being stubborn to the point of not finding the best solutions. Ron and I have also pledged to continue our dialogue so our partnership stays strong.
TIP FOUR: Make sure your partnership goals are aligned.
Develop a unified strategy for your business. This may take a great deal of time, but it is worth it. This is not putting together a business plan that will sit on a shelf. Do you have a written formalized strategy that identifies the vision of the partners and where you best succeed in the marketplace? If not I would encourage you to start strategy planning.
This includes the vision of the partners, a SWOT of the company and detailed action plans to execute key projects on time and within budget.
Figure out where you agree, disagree and make compromises; not on just what you like but what your business needs to succeed. We call these your critical success factors! (Check out the standard six on our site: http://www.filthyrichcontractor.com/systems.html
TIP FIVE: Create a period of forgiveness.
We know partnerships require a lot of work. Doesn't it make sense to invest time and energy in your partnership in a positive that way will bring all parties much benefit. Partners that work and live together have additional challenges. Often the business becomes an overwhelming 24/365 monster. This is a potential recipe for disaster.
If you have been in a partnership for a long time there is probably a lot of good history and some not so good history. Bring the partners together for a "forgive and forget" session. If you can bury the past it will not adversely affect future progress.
This is something you basically do one time. So if you are in a partnership relationship that one person or another is apologizing often this will not be an effective solution. On the other hand if you can approach this sincerely you will bring the partnership and its people into the present and leave the negatives of the past behind. Think of it as the business is beginning a new chapter.
For those of you that fall into the category or working and living together, I implore you to remember what the business is suppose to be about! I know you did not create it, inherit it, or buy it to have disagreements that threaten the relationship. Therefore you shouldn't let it get an ugly head and roar.
Stop the monster from developing in the first place. You can accomplish this by not being overly critical of the other person. Sometimes we end up doing tactical things that we weren't formerly trained for or necessarily like to do. Constantly criticizing your partner is nonproductive. Instead try alleviating some of the other person's pressures.
I suggest you make personal time where discussing the business is forbidden. Ron and I have given assignments to clients that live together to make a date night on regular intervals. Each person rotates planning the next date. It may be difficult at first but it will be worth it! You can even create a game or contest around leaving business topics behind for the date night or a specified time. Make the game fun so both parties come out winners. I will leave the rest to your imagination.
TIP SIX: Make the partnership fun!
If you are a partner then you are an owner too! Make your work place a fun place. I have clients that are partners in business and are also good friends. They do fun things together. Hunting, fishing, watching sports, traveling and drinking fine whiskey and smoking imported cigars together just to name to name a few. Why not? There are many ways that at least part of these activities can be paid for by the business.
I am fortunate enough to be part of a couple of business enterprises and we are having strategy meetings on Caribbean cruises this winter. Who could complain about doing a little strategy in the winter months on a floating office while soaking up sun and exploring exotic islands in our free time?
Or should I tell the story about how all the managers of a fairly large company I was acquainted with raised quite a bit of money for charity by alternating turns in an old fashion dunk tank? I think I'll leave that fun one for a future newsletter.
TIP SEVEN: Don't be afraid to discuss succession issues
Nobody lives forever! Nobody works forever. So it is okay to talk about and plan for the future of the business outside of the partnership. Don't think of this as mandatory retirement. Everybody comes out better when there is a plan for an exit strategy. You may have planned for this is your initial partnership agreement but that was before you could experience the business success. If the agreement wasn't written with the future in mind consider rewriting it fairly with the help of an attorney that understands succession issues of all the parties. We want you spend as much of your own money and enjoy the fruits of your labors while paying the minimal amount of taxes.
Ron Roberts teams with Guy Gruenberg as The Contractor's Business Coach. They show contractors how to grow their businesses profitably. To sign up for their FREE Newsletter or join their Private Club, visit www.FilthyRichContractor.com.