Making a partnership work requires a conscious effort from all partners. As mentioned previously, partners’ skill sets should complement each other. BEFORE you enter into a partnership, evaluate the skills of your potential partners and decide if they complement your own abilities – if so, you are of value to each other!
Once you have entered the partnership, there are a few simple things that can be done to achieve success. Though simple, the following 4 steps are not always easy to follow!
1. Give Up Control
Let your partners do what they’re good at! Trust their strengths and abilities. Your partnership will be much more efficient and effective if you can each focus on what you do best.
2. Set Common Goals
It is important that you and your partners have a set of common goals that you all understand and can rally your staff around. Along with these common goals come roles that each of you will play in achieving them – these roles must be clearly defined. Ensure that the goals are measurable, and assess your progress often with your partners!
3. Work as a United Front
It is important that you and your partners work as a cohesive unit, or at least appear that way in the day-to-day business operations. One should never undercut the other or undermine their decisions when it comes to staff, clients, suppliers, etc. Disagreements should be discussed and resolved privately!
4. Put the Business FIRST!
All partners must always put the business first. What each partner does outside of work should not affect the business, and the business is not responsible for a partner’s personal endeavors. For example, the business’s line of credit is not to be used for a partner’s new home. As silly as that may sound, it happens far too often!
As with any relationship, if you’re willing to put in the time and effort to make it work, you’ll reap the benefits! Follow these steps and you’re on your way to a successful partnership.
Do you have any tips and tricks for working successfully with a partner? Let me know in the comments!
Have you considered forming a partnership with someone who has complementary skills and/or the financial strength that can help your business? In my 30 years of business experience, I have seen both the positive and negative aspects of partnerships. They are always formed with the right intentions, but unfortunately they do not always result in the desired outcome. In fact, over half of partnerships fail.
I have outlined below four of what I believe are the primary reasons partnerships do not succeed.
1. Unclear Roles
When the role of each partner isn’t clearly laid out from the beginning, conflict is bound to arise down the line. When everyone has the “boss mentality”, it only leads to trouble.
Partners must understand each other’s strengths and learn to trust each other. Open communication is crucial to a successful partnership. It is important that partners are transparent in all of their activity within the business and feel comfortable sharing their thoughts and opinions.
2. Unclear Long Term Goals
Before a partnership is even formed, both parties must discuss their long-term objectives; if these do not match up, there is bound to be a problem in the future.
For a partnership to be successful, each side must clearly define their expectations and aspirations for the business. It does not stop there however. These expectations and goals must be reviewed regularly. All partners should be on the same page throughout their partnership, or at least in the same chapter!
3. Dispute Resolution
Undoubtedly there will be disagreements in any partnership, so it is necessary to instill a procedure to follow for quick resolution. Whether the partner with the most experience has the final say, a compromise can be made, or a third party decision maker is involved, there must be a defined resolution strategy.
4. Disregarding the Formal Agreement
Having a formal shareholders agreement is often overlooked in many partnerships, but it could not be more necessary! Do not disregard these because of their cost or time commitments, you will regret it if something goes seriously wrong.
The document should cover compensation, exit options, death, and other important topics. Everyone’s interest should be protected. Alternatively, it can prove to be very beneficial to develop a charter: a non-legally binding document that creates a structure for the working relationship of both parties.
If you’re entering a partnership, be sure to take all the right precautions to ensure that the relationship will be a healthy and sustainable one!
What are your experiences with partnerships? Let me know what you think in the comments!
Are you ready to dive into the world of franchise ownership, but aren’t sure exactly where to start? You aren’t alone! The franchise industry is large, and one can easily get lost if they are not sure what they’re looking for. Using my experience from my own TAB franchise ownership, this week I would like to share with you the steps involved in finding the right franchise business for you.
- Decide on what industry you’re interested in. I mentioned in my blog last week that there is so much more to the franchise industry than fast food restaurants. Do not limit yourself to looking in just one area. Explore all the industries, from food and retail, to finance and professional services. Do not be afraid of the unknown – look at all options as opportunities to learn something new. Most importantly, determine what you’re passionate about to guide your search.
- Select at least three franchises in your industry of choice. Being able to compare the franchises will prove extremely helpful when deciding which is the best fit for you.
- Contact each franchisor and discover who they really are. Inquire about the process involved in purchasing a franchise. Every good franchisor will have a clearly outlined process. Having this conversation with the franchisor is crucial before continuing to narrow down your search.
Note: Be wary of franchisors that look for money upfront or require you to sign any commitment at this stage. These are red flags that should bring their credibility into question. Their process should allow you to determine how fast or slow you want to proceed.
- Review the franchise disclosure document. It should provide a complete picture of the franchisor from legal structure to financials as well as detail franchisee commitments and franchisor responsibilities. You may want to have an experienced franchise lawyer review this with you.
- The fun begins when you are ready to visit head office and meet the people you’ll be working with. You should meet all the key individuals you will be working with and learn about their training program, marketing resources and other support systems they have in place.
- Before making your final decision, you should have access to all existing and past franchisees so you can ask them about their experiences with their franchise and their relationship with the franchisor. Make sure you have all the answers you need before signing any agreements with, or paying any money to the franchisor.
- Once you’ve made your decision to move forward with purchasing the franchise, communicate your interest to the franchisor and ask for the franchise contract. Be sure to have the contract reviewed by your lawyer.
- Your initial payment usually includes the licensing fee, marketing support, and training. These three components are necessary for the success of your franchise.
Keep in mind that processes for small and large franchises may differ. Size changes a number of variables, so keep that in mind when comparing franchisors.
I always enjoy hearing from you. Please share your franchise questions or stories in the comments below.