Business partnership refers to an agreement between two or more individuals to run a business and share in its gains and losses. The decision to have a partnership is often born out of the need to split the finances or workload.

Although it might sound easy - like a simple division of labor - business partnerships are delicate and the underlying business's success depends heavily on the relationship between all partners. 

The concern many entrepreneurs face when seeking a business partner is how to choose the right one. Since running a business is already challenging, nobody wants to have the wrong person in their corner.

The dilemma of choosing the wrong partner and having to bear with them or even finding a replacement is enough reason for you to strive to be a good partner yourself, or the best partner you can be. If you’re not sure how to go about it, do not worry, this article will help you learn the ropes.

Challenges of Business Partnerships

“Understanding the problem is half the solution.” We believe this to be true. As a result, this section will focus on the most common challenges that rattle business partnerships. You and your partners should have a look together, identify what applies most to your team, and read on to find ways to deal with the problem. 

Unclear Goals and Values

Certain business partnerships are built on vibes - vague and unexplainable feelings but do not have any real clear-cut goals. This never ends well. Partners must be chosen out of merit and partnerships must be built on a solid foundation of goals and values. 

Unclear Exit Strategy

Partnerships don’t last forever. However, they don’t have to end badly either. One way to ensure that things are orderly even when a partnership is winding down to a close is to have an exit strategy well spelled out. An unclear exit strategy would mean that one or more partners can bail without prior notice or proper handovers, exposing the company to a lot of risk. 

Communication Challenges

Taking business decisions without communicating with your partner(s) is the first sign of poor communication. The more this happens, the higher the chances of a fallout within the team. Moreover, communication challenges lay the foundation for operational blunders and fraud, which could tarnish the image of stakeholders and invoke legal action. 

Personality Clash

Personality clashes give rise to emotional conflict. This is because people with different lifestyles or personality traits have varying perspectives on things and, therefore, exhibit dissimilar emotions. We believe it may be necessary for businesses to - as much as possible - include assessments of temperaments and other psychological or biological traits in their hiring processes. 

Emotional Conflicts

The feelings of one partner about an action, subject matter, or business project might not match those of the others. This is where a majority of the friction in business partnerships takes place. Conflicting emotions among business partners could lead to a wide range of problems, including those already prone to happen in a partnership. 

Loss of Autonomy

By having someone partner with you in running your business, some things will have to change. An example is the way you work or operate. The consistent presence and influence of a partner creates a loss of autonomy,  pushing some people to feel like they’ve lost control.

Operating seemingly despite this loss of autonomy is a sacrifice that business partners have to make to create a balanced environment and ensure that each partner has access to some of their preferences. 

Taxation

Being in a business partnership doesn’t mean that all members will have to pay the same amount of tax. Different people are liable to individual tax figures as a result of factors such as income, filing status, and tax credits. Variances in taxes can cause rifts between partners and lead to a negative attitude or performance within the team. 

Liabilities

A business partner becomes a liability to others if they incur a bad debt payable either by the corporate entity or its partners. In addition, a partner’s character might threaten the reputation of the business or group, also making them a liability. 

Poor/Unequal Input or Performance

The commitment and contribution of business partners must remain even or, at least, optimal. This is crucial for two reasons. First, unequal contributions have a way of drawing down the team’s overall performance. Secondly, they can stir up a storm if a partner begins to feel like they are being used when their role or input is greater than that of others, or like they are being undervalued when their role or input is lesser than that of others. 

Positioning as The Best Partner

Communicate Properly

Business, like life, comes with its challenges. As a partner, you must bear in mind that every other partner faces their fair share of this so the best thing you can do is to report all challenges, issues, or setbacks quickly - in the best possible manner. Remember to be polite and straightforward no matter who you are speaking to. 

Prompt reporting smoothens the communication process within your business team - not to mention that it aids in building trust and mitigating conflict among partners. Moreover, a big part of communicating is asking for opinions from your business partners. You must do this politely and ensure that you are all sharing and exchanging constructive feedback in the process. 

Manage Your Emotions

It is not usual for people to be visceral - acting or reacting out of sheer emotions. However, in most cases, this does not help a business function as it should. Business partners, therefore, have to think and act rationally even if they would have done otherwise in their ventures. 

Recognizing your emotions is an important first step to managing them. A helpful guide is outlined in this Skills You Need article along with actions like talking it out, distracting yourself before returning to the issue, and accepting all the emotions you feel. 

The other aspect of managing your emotions as a business partner involves taking an open-minded approach to allow yourself to embrace change and evolution. Your emotions could make it difficult for this to happen, however, you need to carefully consider if it is not time to move on. 

Finally, you might find it easier to manage your emotions by just thinking of the impact of a decision on your business partners. 

Follow Partnership Agreements

Partnership agreements spell out the terms for engagement and membership within a partnership. It details the requirement for becoming a partner member, the procedure for carrying out activities as well as reporting issues, and a detailed conflict resolution or redress process.

Knowing this, and having consented to it, business partners are obligated to respect and follow the terms and conditions exactly as outlined. They must inform partners of their opinions and decisions to avoid creating impromptu situations. Also, they must maintain a professional relationship and be law-abiding at all times. 

It is okay to employ the services of a legal professional if you need help with interpreting partnership agreements or other documents. 

Evaluate Input and Performance

If you intend to be the best partner there is, you will need to be consistent about making quality and sufficient input. This goes without saying that you’d have to measure your performance over set periods. There are several ways to measure input and performance. Some of the most common are: 

1. Checking Expectations Against Deliverables

No serious calculation is required here. Only a numerical measure of your expected results against your actual result. Let’s say, for example, that you are expected to invite a minimum of one partner to the team every year. You would simply have to count the number of partners you brought on at the end of the year to evaluate your performance.

2. Measure Return-On-Investment (ROI)

Businesses and return on investments are like saying five and six. The ROI metric is used largely to estimate the efficiency of an investment option. This involves decisions to understand the potential rewards of proposed products or services or the values that specific potential partners may hold. 

The mathematical formula for assessing ROI is as follows:

ROI = Investment Outcome - Investment Input  x 100%

3. Investment Outcome

A final word on evaluating input and performance is knowing what is required of you in the first place. Ask as many questions as necessary to determine what your deliverables are. Trust us when we say that doing so will save you a lot of time and effort. 

Learn As Much As Possible

They say learning never ends and they are right. Besides, if you truly want to stand out as an impeccable business partner, you need to learn as much as you possibly can. 

You can start your learning journey by curating a list of topics you are unfamiliar with. Examples are whole subjects such as taxation or specifics like an inquiry on how taxes should be filed. Up next will be finding the right sources for your read. This should be relatively easy given the widespread availability of digital tools and resources. 

Learning as much as you can empowers you to better understand your role and responsibilities as well as become more fitted to handle them both. 

Benefits of an Ideal Business Partnership

Build Partner Confidence and Involvement:

By walking the right path and being the best partner, you bring a sigh of relief to your fellow business partner. They see you as someone they can trust. In addition, your competence might be an inspiration to others, driving a positive revolution across the entire team. 

Enhance Team Credibility:

It takes a customer interacting with one reliable and professional business partner to build a positive impression of the brand. This is how a team gets to earn credibility, especially from the public or other external entities, and it accurately reflects the role of ideal partnership in this achievement. 

Conclusion

Think of how having a good business partner will make you feel. Relaxed, supported, and perhaps confident in the future of your business? This is exactly how you should make your other partners feel too.

The secrets have been spilled all over this article and it is left for you to pick them up and learn them. We hope this brings your best side out. Tell us how it impacts you and your team in the comment section below. 

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