More than 80% of the partnerships fail at some point. There may be various reasons; but if a partnership has to succeed these two things must happen:
- A strong understanding between partners
- Growth in business
Though it sounds so simple, it is quite very difficult to achieve; yet achievable. Let’s discuss on how to achieve the first point.
A strong understanding between business partners
‘Partner’ literally means two or more people engaged in a same activity. It can be a business, marriage, sports, travel etc. Usually partnerships happen in many ways, when some likes someone’s idea, when someone trusts someone and feels he will bring profit, when someone finds the concept a complimentary plan to what currently he is doing, when they are good friends, when someone wants to invest somewhere etc. To be frank, a partnership should happen backed with a strong purpose, willingness to invest and commitment to work. Without these, whatever the reason to start, the way ahead will be very difficult.
How to choose a partner?
You may happen to meet the right person who believes in the purpose of the venture, ready to work and invest. It usually doesn’t happen by searching around for finding someone to make a partner. When found look for these qualities in the person:
- Is he/she trustworthy?
- Is it necessary for him/her to join with you?
- Is he/she hard working?
- Is he in a position to invest?
- Is his/her history clean?
You may not get positive answer for all the above questions. But you can logically take a decision. It is commonly seen that people don’t think or talk about these before getting into a contract. Later when they start discussing, they get to realise that both of them have extremely different ways of thinking. To solve this, the following questionnaire can be filled by all of the partners before getting into the contract.
Questionnaire for Partnership
- Do you agree to invest whenever required, proportionate to the stock percentage offered to you?
- Do you agree not to use or reproduce any content/ concept/ write-up/ conversation out of the company?
- Do you agree not to start or be part of a business which may be directly competing with the company?
- Do you agree to contribute towards the growth of the company as sales and business, in addition to the investment?
- Do you agree that any partner not achieving the expectations towards the contribution to the growth of the company may be asked to exit?
- Can you please brief on your expectations about the venture?
- Can you please give an idea about your expectation on each partner in the contract and on the partnership?
- Will you be able to work actively for the company? Or will you be working part-time? How would you like to value the efforts of partners working whole time?
- Do you agree to give out shares in case of the requirement to raise funds?
- Do you agree to make yourself available at high priority to execute any necessary actions with urgent nature for the growth of the company?
By the end of this process, both of the partners will have a better picture about eachother. However, the most important point is that every person must be doing something before getting into this partnership. They may want to continue that simultaneously. Hence you need to clearly understand what actually makes him happy and how you can help him to achieve that. When you are ready to do that, he will get more time to work with you and your project may get extra thrust. The mindset of every partner should be to help each other so that to make others comfortable to spare time and move ahead, together. If you try just to take things out of him, one day he will quit, for sure.
Understand when one partner doesn’t work as expected, others get irritated and they will either try to lay him off or turns down their contribution towards the venture. It spreads like cancer. So don’t underestimate the importance of an open talk and a mutual agreement before you kick start.