The 7 Step Checklist For A Successful Business Partnership

My last post about getting into bed with pigs has inspired this post. I have decided to take you through a “Do” list for ensuring a successful business alliance. The following guidelines apply across all manner of business alliances and are not only limited to equity partnerships or partnerships with a pig. They constitute a best practice checklist and process flow for partnership formation.

Forming a business partnership is as much a science as it is an art. Success as business partners takes more than “chemistry” and a shared the vision. In whatever context, a structured approach to partnership will save the day.

The strongest of marriage unions have weathered a few storms along the way. A lot of preparation (counseling, financial and family planning etc) goes into preparing the union for the future. Such preparation can not in any way stop the inevitable curveballs and nasty surprises that test marriages. However, they prepare the union to face such events.

Most are familiar with the story of Sharon Macheso,  who soon after the marriage found out several undesireable attributes in Kudakwashe Munetsi and decided she wanted out within three months of the wedding. Needless to say, the couple is still together… That Nigel Chanakira and John Moxon’s business marriage barely lasted 3 years (and the reasons why…) is a matter or record. Business alliance, much like marriages can and will be tried. Some surprises come early, some late, we can not control those events but we can do our best to prepare.

Here we go…

I have prepared for you a structured approach or process flow with seven steps that you need to follow (in principle, at least) to ensure that your partnership is prepared for the trying times in the future.

HARMONISE PARTNER ATTRIBUTES

  1. Create a shared Vision, Mission

If all brains aren’t going in the same direction, problems are bound to arise. It is not a big issue if partners have different motives. Each person in the partnership will have their own reasons for being in the partnership. Sometimes people seek a partner for capital, sometimes for expertise, sometimes for connections. So motives for being in a partnership will never sync.However, partners need to share the same vision for the venture. The first stop is to discuss and put the joint Vision and Mission into writing.

Business meeting
Discuss…
  1. Expectations,

Because motivations do differ between partners, their expectations for the union will definitely be different. It is very critical that each partner’s expectations are discussed before any contracts are signed.

  1. Strengths and Weakness

It is easy for partners to overlook the relative strengths and weaknesses of each individual once they are confident that the venure will meet their expectations.  Bringing out and utilizing the strengths of the individuals within the partnership will add to the motivation, the energy and the odds of long-term success. Make note of your personal strengths and ask your partner to do the same. Then sit together and discuss how you can apply these to the business.

BUSINESS PLANNING

Magnified illustration with the word Business Plan on white background.

  1. Goal, goals, goals

The ideal way for partners to approach goals is to start with goals for the company, then each create goals for themselves. (1) Individual goals should support the company goals. (2) Goals should measure and support expectations. Writing these is especially important for partners.

  1. The Business Plan

Once you have defined shared goals, you should develop at least an outline business plan on how those shared goals will be achieved. The business plan should be a realistic commitment that sets out the (1) human, (2) capital and (3) cash resources required on a (4) timeline.

FORMAL UNDERTAKINGS

Despite the level of chemistry and apparent compatibility between partners, the necessity of legally binding and enforceable partnership agreement documentation cannot be overstated. The contracts listed below should never be overlooked.

Partnership-Agreement

  1. Written partnership agreement (confirming the above)

There should be a written statement identifying for each of the partners their ownership, rights and obligations. This should include clear descriptions of any critical items for the first 5 topics in this article.

  1. Written exit strategy (just in case)

A prenuptial agreement is often deemed necessary for some marriages (in the West, at least), outlining the basis on which either partner might exit the union. The principle is the same here. This document should be revisited from time to time to make sure that it is still fair and equitable.

…and, here we stop.

It is possible to form a watertight partnership or business alliance. The best approach is to employ a structured approach which adheres (in principle, at least) to the stages outlined above. If you are new to this, it may be worthwhile to engage the services of a knowledgeable advisor to guide you through the formation of a business alliance. A future article under this theme may deal with how you can select the best advisor for such a task.

Remember, we can do BIG things…

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