Preserving a Relationship Between Small Business Partners
Small business owners aren’t always solo flyers. It’s quite common for two or more entrepreneurs to get together in order to pool resources insights and business planning talents in order to achieve more together than they ever could apart. When business partners are working well together, it is a force to be reckoned with, making it tough for competitors to gain the edge as problems are being attacked from multiple angles at all times. However, when there are two people who are in equal management roles who don’t agree on something, there is a lot of head butting that can ensue with potentially very negative consequences for the business in the end. It should be considered part of small business management training to learn how to effectively compromise and communicate with your business partner. neglecting this important aspect means that, if and when something goes wrong you can be blindsided by serious problems.
Recognize each other’s strengths. In order to avoid problems altogether, it can be helpful to split up management tasks in a way that minimizes decision making overlap. For example, one part owner of a business may have a gift with numbers, and therefore wish to be the one who works with pricing and keeping the costs for supplies down, while the other may really want to write the copy for their marketing materials. This division of labor can keep conflict down, since each business owner recognizes what they are responsible for and can let the other perform.
Share the costs of doing business, rather than pooling your capital to begin with. Business partners don’t always come into relationships on equal financial footing. If costs are not going to be shared evenly with some kind of understanding in place, it can be prudent to create a contractual obligation to reinforce verbal agreements as a matter of course. Additionally, don’t put your available capital into a shared account if you can help it. Without calling into question the integrity of your partner, know that simply sharing expenses with separate accounts is the way that you should enter the relationship in order to minimize friction and keep yourselves focused on your goals.
A business partnership is like a marriage, you may love each other, but get a written agreement. Life, with all it’s twists and turns, is truly unpredictable. No matter how rosy the future with your business partner seems, you should have partnership and exit agreements written up by a lawyer before you enter into business with each other. It’s not cynical, rather it should be seen as a sign of respect for each other that you are willing to write an agreement protecting each other’s interests. If the worst should happen, you will be very glad you took the time to do this.
Photo Credit to USC Upstate on Flickr