6 Ways to Run a Successive Partnership Business
Many a times running a partnership may face challenges which may threaten the success of the Business Partnership. Business partners may disagree on different issues and their expectation may collide. It takes a lot to effectively carry out a successive partnership. Partnership type of business is mostly considered as small scale business and therefore information of the formation may not be that comprehensive. Here are six important ways to help you effectively run a partnership business.
- Keep Communication Open
The biggest cause of clash between business partners is normally communication. You cannot be effective partners if you do not communicate well. Good communication doesn’t necessarily mean that you have to always agree. At times you have to agree to disagree. In this case, one of you has to compromise so that you can get to a common ground. You have to make sure that whatever you do, it should be for the best of the business. You need to discuss important issues with your business partner to successfully make vital decisions pertaining to the business. It is normal to disagree, but it has to be a healthy one. A successful partner should learn how to pass crucial message to the co-partner in the most friendly and flexible way.
- Learn to Share Expenses and not Capital
You need to clearly identify what to share and put it into writing. For capital, put a distinction in what you actually own and what you co share with your business partner. In sharing expenses, you will be able to share profit and losses therefore reducing chances of future confrontations. Putting a distinction on the capital will help you when the partnership gets to dissolve. As for the expenses, both of you get to share the costs since you are enjoying profits. In this case, you have the same rights to the business as partners.
- Have a Written Agreement
The Business Partnership should be legalised through the signing of a Partnership Agreement. The agreement outlines rules that govern the partnership and each partner should comply with the signed agreement. Not doing so translates to a breach of the contract. Partners need to fully understand the Act and follow it for the success of the business. You need to consult the service of a lawyer and an accountant to help you draft an effective agreement which should be signed by the partners. The agreement binds you under certain conditions that both partners must agree. You are responsible to comply with the indications of the agreement. If at any time you feel like your partner does not hold dearly the contents of the agreement, then you can take legal actions as reflected on the deed to dissolve the Business Partnership.
- Quality Work Ethic
Poor work ethic can potentially poison a potentially successive partnership business. A small scale business of partnership nature face integrity and ethics hiccups all the time. It’s upon you partners to know how to handle the hiccups without compromising the integrity of the business. You might feel frustrated as a partner if the other partner works less and brings little returns to the business. Good work ethics create good and successive running of the partnership business. Always try to give your level best in the business, you are a co-owner and therefore liable.
- Clearly Identify the Strength and Weakness of your Partner
Learn to observe the strength and weakness of your business partner to effectively coexist. Just like in marriage, you are in for better and for worse. It is also advisable that your partner gets to now you better. Let them know your strength and weakness. This helps solve possible future problems. Your weaknesses should be compensated with your partner’s strength and vice versa.
- Develop an Exit Plan
You get to a Partnership Agreement for different reasons. Some people especially in small scale business do it share losses and expenses. Others get into Business Partnership for growth reasons. It is very important that you outline the circumstance or circumstances under which the partnership should unfold. With such a plan, your interest as a partner is protected and the investment well reserved. You don’t have to worry about losing your capital and years of hard labour.
It is now clear that running a successful partnership is a procedural undertaking. It takes all members of the partnership to contribute to the success of the business. As a partner, you have to learn how to communicate with your co-partner to avoid any kind of collision of ideas. Always have an exit plan in writing and the partnership will be a success. It’s good to run business with a supportive and ethical partner.