To enter a partnership or to go it alone?
We have enjoyed many benefits from our business partnership over the past few years. Coming from similar backgrounds, we were able to pool our experience and expertise and utilise our combined skills to drive our company forward. In the same way, we have shared the responsibilities that owning and running a modern business entails and this has helped ensure we both work fair hours and achieve a good work / life balance. When faced with challenges, we have been able to support each other and bounce ideas between us to come up with the best solutions. We have also been able to focus on our own key areas of the business so we can utilise our best skills and gain maximum job satisfaction.
What’s more, the business’s financial situation has benefitted from our partnership as we had access to twice as much potential capital to help set the company up in the first place. From here, we set a target range for payout ratios, establishing from the very beginning what percentage would be reinvested back into the business, which has facilitated our continued growth. Within this budget, we allocated funds for staff salaries, bonuses and any incentives, the various necessary insurance policies, marketing activities and so on, putting protocols in place before we started.
One of the biggest plus points of our business partnership, however, has been stability. Giving us and our staff confidence in the longevity of the company, this has provided a better working environment and a happier workforce – and if the team is content the business is likely to do well.
These benefits have all been the result of a good working relationship, which in itself has resulted from several factors.
The first and possibly most important aspect of our professional partnership is that we tend to agree on major business decisions. It is very important when sharing ownership of a business that partners work well together and that they share the same key values and ethos. It’s also beneficial for both partners to have the same business goals in mind, to both drive the company in the same direction. Of course, disagreement is inevitable at some point, but if compromises can be made to satisfy both parties and ultimately be in the business’s best interests, there are no devastating effects. If anything, slightly different perspectives can bring new and fresh ideas to the table, which can be highly advantageous especially in areas such as marketing.
With regards to the day-to-day running of the business, aspects such as staff management are important to agree upon as well. In order to ensure consistency with decisions about taking on additional staff, job roles and responsibilities, dismissing and promoting staff, training, salary, bonuses and holiday allowances, we designed certain protocols to follow in each instance. Most of this is of course incorporated within staff contracts so, once agreed, these procedures are easy to implement. Regarding the need to take on new staff, we found that our common business goals made these decisions simple as well and recruitment was aligned with company expansion.
Clearly, there are many advantages to be enjoyed when considering a business partnership, but there are of course some ground rules that need to be laid in order to encourage success. Some of the most important include:
- Dispute resolution procedure – even the most in-tune of partners or good friends will disagree on things from time-to-time, so it’s important to have a procedure in place to resolve such issues before they become a problem.
- Exit plan – it is necessary to be completely open with a business partner about your goals for the business and your plan as an individual. If you both understand the other’s intentions and have an exit strategy in place before you start, you are far less likely to encounter difficulties when the time comes for one (or both) of the partners to consider leaving or retiring.
- Communication – open and honest communication is necessary between partners so that both understand where the business is and where it is going. This also helps partners remain united should any problems need to be addressed regarding staff, regulation or clients.
As with anything, you get out what you put in a business partnership. As long as everyone is on the same page and protocols are in place to ensure continued equality in contributions, a partnership can definitely maximise a business’s potential.
Originally Published in The Probe in August 2016