Getting a new business venture off the ground is no easy feat. Many people understandably choose to work with others to get this done and there are a variety of reasons for establishing a partnership instead of establishing a sole proprietorship. The benefits of combining forces and talents can be great, but they require careful consideration when it comes to selecting a partner.
Essential elements of a good business partnership
As explained by Entrepreneur magazine, one of the reasons to team up with someone else is because the different parties may bring unique benefits to the table. This may be in terms of skills, connections, industry knowledge or more. For this reason, it is important that potential business partners be sure they are not selecting someone too akin to themselves, thereby negating this benefit.
Another factor that potential partners should be honest with themselves about is their ability to completely trust each other. A business partnership is a very close relationship and requires a level of trust similar to that in a marriage. Without this trust, challenges may be harder to overcome.
Clear definitions are important
According to Forbes, it is important for business partners to clearly outline the responsibilities that each person will have in the new company. This not only helps to prevent one person from overstepping their bounds in the other party’s area but may help to avoid gaps by not identifying clear ownership for a function that is essential to the company’s success.
Before forming a formal partnership, people may wish to work together in a consultative manner to test out their ability to effectively collaborate.