Is your business looking to partner with another? Partnerships between businesses can result in many great circumstances that wouldn’t have otherwise been available, but if there is conflict, it can be detrimental to both parties.
If you are looking to have a stress and conflict free partnership with another business, follow these 6 tips.
The first, and most important element of a great partnership is to define roles. Rather than treating your partnership as if you have equal responsibilities, treat it as any employee-based organization would. Assign roles and responsibilities, such as accounting, payroll, employees, etc.
Many businesses that start partnerships try and split the work equally. This will result in double work and even the feeling of stepping on each other’s toes, which is one of the fastest ways to start conflict.
Nothing starts conflict faster than miscommunication. Poor communication is bad in any relationship, but when there is equity, money, and jobs on the line, it can be fatal to your business. Communicate every detail of your workings with your partner to ensure they know exactly where you stand and vice versa.
Communication is a double-edged sword. Be sure that you are communicating the right way. Although you may feel that you are communicating what you need, it is easy to over-communicate, which will give off the sense that your work is better than your partners. Remember to motivate, rather than designate. This will make for a conflict-free relationship.
Be Upfront With Finances
Being up-front about your finances is crucial for a successful partnership. If your finances are not where they should be, or even where they need to be, don’t hide that from your partner. By being up-front about your finances, it will help build trust in the partnership.
Many businesses seek partnership in a time of poor cash flow. Don’t look for a partnership as a lifeline. There are many ways to build your finances without looking for another company to bail you out. If you are suffering from poor cash flow, there are many types of business financing options that can help. Business loans, short term loans, and invoice factoring are all great options to build your business finances in times of need.
Agree on How Profits will be Split
Before you start doing business together, it is important that you agree on how your finances will be split. Not all partnerships will result in equal payouts. Even if they are equal, it is important to discuss and finalize this before any deals are made. Business financing and profits are two of the biggest causes of failed partnerships. Don’t let this conversation slip between the cracks.
Get Everything in Writing
No matter what, get everything in writing. Any kind of agreement or deal that you make with your partner should be in writing. Some of the most important things that you should have in writing are:
- Roles & Responsibilities
- Decision Making
- Dissolving the Partnership, and more
Both businesses should work together to get these details in writing to ensure that a smooth partnership is on its way. These documents will act as the binding “rules” on how your partnership will operate, and the consequences that will occur if they are broken.
If at any time during the setup or throughout the partnership you come across conflict, it is crucial that it is addressed. Sweeping issues under the rug will only lead to major problems down the road. Squash small conflicts before they turn into major issues, or potentially ruin the partnership.
Starting a partnership can be an exciting time for your business. We hope that before you start your new partnership that you consider these 6 tips to avoid conflict.