The Keys To A Successful Business Partnership

When deciding to collaborate with someone on a project or start a new business partnership, there are a handful of important steps to take before moving forward.

Having worked with multiple partners on multiple projects over the years, I know that successful partnerships can be incredibly gratifying. But on the other end of the spectrum, a bad partnership can cause stress, have negative financial ramifications, and, worst of all, ruin a perfectly good relationship.

 

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4 Steps To Creating Successful Business Partnerships

Step 1: Share expectations and big-picture goals

This is the most important place to start when trying to develop a successful partnership. If you aren’t on the same page with the fundamental parts of a collaborative business venture, you’re asking for trouble.

With every project I’ve had a partner or co-founder on, we’ve started the business relationship by having a clear conversation about what we expect of each other. These are good topics to discuss early on:

What role does each person have?

Is one person handling design and development while the other person handles operations and customer service? Have an honest discussion about what each partner should handle. It’s best to be 100% clear early on so you can outsource things if needed.

How much can each partner work on the project?

Is it just small side project where you work on things a few hours per week? Is it a full-blown new business with everyone working full-time? Things don’t need to be equal, as long as you’re both on the same page.

Is anyone putting up money? Who is paying for things?

I could dedicate an entire article to the topic of raising money and getting funding. For the sake of this article, we’re just talking about co-founders (or partners) putting up some money to get the basic operations running (business filing, website costs, etc).

During these discussions, it’s also good to decide who is paying for the upfront costs and how that’s being documented. It’s best to have one person pay for everything and keep track of expenses out in the open. Use a shared Google Spreadsheet or, if you want to get fancy, accounting software. Either way, just be transparent and over communicate (which you’ll read more about in a minute).

Where do each of you see the project/company going?

If one person wants to make $10,000,000 and the other person just wants some side income of $1,000 per month, there’s going to be trouble. Having shared long-term goals is an important part of a successful partnership because both people are working toward the same thing. If you find out that you want to build a company that you can enjoy and grow for 20 years, but your potential partner is just looking for a quick exit, you’re going to run into lots of problems very quickly.

How will you communicate and how often?

I’m going to sound like a broken record by the end of this article, but good partnerships thrive when the partners over communicate. Are you going to create a Slack channel for your project/company? Will you have weekly Skype calls? Will you create a separate email inbox or Basecamp account to keep track of all to-dos, tasks, and discussions? It’s imperative to be on the same page with how communication will be done—otherwise communication will break down quickly.

Step 2 to a successful business partnership: Get things in writing

It may seem premature, but I believe the earlier you can get a partnership or operating agreement in place, the better. This keeps everyone in check and also adds a bit of legitimacy to your partnership (and project/business).

Option #1—Write the agreement yourself

Listen, not all of us want to create companies that must have the option to get purchased or have funding injected into them. It’s perfectly okay to write an agreement on your own. I’d recommend working from an operating agreement template from a site like PandaDoc. This will give you a framework for a partnership agreement that’s quite a bit better and more legitimate than some notes on a napkin (or piece of printer paper).

Option #2—Hire a lawyer

Oooh, scary sounding, right? Well, it doesn’t have to be! Not all lawyers are blood-sucking vampires. Some are actually really nice people that go on road trips and own basset hounds. Think I’m kidding? I just described the lawyer I’ve used for many of my projects: Ruth Carter. Ruth has helped me with multiple legal documents and can easily and affordably help you get a legally-binding* partnership agreement in place.

*Not to say that Option #1 isn’t legally binding, I just know that some people prefer to have a more structured and “official” set of legal documents.

Step 3: Over-communicate, over-communicate, over-communicate

I’ve partnered with my good buddy Paul Jarvis on multiple projects since 2014. And what’s the one reason we both believe we’ve created a successful partnership? You might have guessed that it’s our love of animals, and that definitely helps—but no. It’s how much we over communicate.

Is Paul feeling like a project we’re working on is heading in a different direction than planned? He’ll ask me to hop on a Skype call to discuss it.

Are we building a website? We’ll discuss every decision that’s being made and hear each person’s perspective on all decisions. Even though I always defer to Paul’s judgment on all things design when we work together, he still respects our partnership enough to show me early mock-ups and walk through all his decisions to make sure we’re in agreement.

If one of us messes up, do we allow passive aggression to rear its ugly head? Hell no! We all make mistakes. Every person in every partnership is going to screw something up now and again. We quickly admit to things we did wrong and try to support the other person to set things right again.

Slack to the rescue

I mentioned it earlier and wanted to bring it up again because of Slack’s incredible usefulness. Paul and I have our own dedicated Slack channel where we communicate daily. Whether we’re in the throes of working on a project or we’re just coasting along in between, we’re in constant communication. Slack has helped us prevent issues from happening by keeping us connected*.

*We discussed starting a Slack channel together and agreed that it would be something we paid attention to on a daily basis. We don’t expect each other to answer every message at every moment of every day, but we’re on the same page with keeping an eye on things as often as possible.

You need face-to-face time (or at least ear-to-mouth time)

I find it incredibly helpful to take conversations from words typed on a screen to actually talking to each other. There’s a lot of emotion and tone that gets lost in digital communication, and partnerships only get better when you can understand someone with 100% clarity.

My co-founder of Teachery, Gerlando, and I also use Slack to communicate. Unlike Paul, we find ourselves often working at different hours of the day. Weeks can go by before we realize we haven’t had an actual conversation. On a recent call, we realized it had been over a month since we’d heard each other’s voices. That call was a great way to reconnect on our goals for Teachery, and also to re-establish our excitement for our project.

No matter how many emojis you use, it’s not the same as hearing someone’s voice or seeing their face.

When something goes wrong, attack it with vigor

Do not let errors and issues fester. From years of experience, I can tell you that getting on Skype to hash out a problem can save hours/days of back and forth (plus the angst and stress that go along with it).

Things will go wrong. You will mess up. Your partner will do something you don’t like. Have an immediate conversation (preferably by phone/Skype), and fix the issue immediately.

Step 4: Have honest reviews

Just like you’d do with an employer or employee, set times to have performance reviews with your partner. Performance shouldn’t pertain to just financial stuff. These reviews should also be a time when you can speak openly and honestly (even though you should be doing that often already).

Monthly reviews are a great way to check in on each other from a high level. Working with someone on a project can easily turn into talking only about tasks and to-dos. It’s important to revisit the big picture goals and ensure everyone is still in alignment. Did your goals for your project change? That’s totally fine and will probably happen. Try to stay in sync with changes.

Reviews are a great time to reflect on the previous parts of a project. They can also be a powerful motivator.

 

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How Do You Improve Existing Business Partnerships?

You may be reading this article and already have a partnership intact. Things may be going smoothly, but you may not have an agreement in place, and you may not have even had expectations or long-term goal discussions.

Start now!

Don’t wait. Don’t put these important foundational discussions on the back burner. You want to have them as soon as you can, no matter how far along you are in a project.

If you feel like you’re in a partnership that isn’t going as well as you’d planned, have your partner/co-founder get on a call immediately. Bring everything to the table that needs to be discussed, and put everything out in the open. If you don’t think this is a possibility, your partnership may already be doomed to fail. I don’t say that to scare you. I say it because it should be a red flag you take immediate notice of.

Partnerships are a great way to tackle new projects and stretch yourself to try new things. By approaching them intentionally, you can have a much better chance of success.