A number of successful businesses were started in partnerships, Microsoft [Bill Gates and Paul Allen], Apple [the two Steves: Jobs and Wozniak], Mugg and Bean, Deloitte and Touche, Harley Davidson, Google etc.
Partnerships/alliances have multiple advantages: range of different skills when brought together in one business can have exponential growth in the business, the 1+1=11 effect, more hands to do more work because we are able to service more clients and therefore increase market share.
The following are some of the factors to consider when deciding on business partnerships:
The temptation is to look for partners who have the same skills as you. We tend to think that because we share the same skill therefore we have the same passion.
Unfortunately people who have the same skills sets tend to compete against each other. And it serves no purpose to have the same skills sets with the same strengths, what happens in areas where you may have weaknesses e.g. all partners being accountants, who will do the marketing.
It is always better to look for partners who will bring complementary skills instead of competing skills.
It is important for the entrepreneur to do a personal SWOT analysis and then decide which types of skills he/she lacks and areas where there are weaknesses is where a potential partner should compliment.
It is important to set the minimum working hours, deliverables and targets so that all the partners contribute to the partnership, alliance in a fair and equal manner.
When guidelines are not set, a partner’s whose work ethic is high may feel she is carrying the partnership alone and ultimately feel being taken advantage of whiles other partners are lazying around and not putting in their worth to the partnership.
In any partnership relationship, there has to be a leader, a CEO. Even in 50/50 partnerships, there has to be a leader who takes responsibility and accountability of the partnership decisions.
In a partnership of two people where one partner is responsible for marketing and another for finance, decisions that have a marketing implications are to be taken by the marketing partner and decisions that have a finance implications must be taken by the finance partner, but decisions that have a strategic or leadership impact or the overall operation of the partnership must be taken the CEO of the partnership.
It is important that the partners decide who will be the leader of the partnership. This not only saves time when it’s decision-making time but also assigns responsibility and accountability.
This is often overlooked until there are problems in the partnership. Morals and ethics have the potential to break partnerships.
At the onset partners must decide the critical moral and ethics standards to adopt. Does the partnership do things by the book or do the partners cut corners when necessary.
Off-course ethics is a grey area. Ethics can be relative, what is ethical to one person is not necessarily what is ethical to another. The issue of paying bribes may be normal business practice in other nations, they are even called gifts or “management handling fees.”
Some people may argue that doing things by the book depends on who wrote the book. The partners must agree on what are the ethical considerations and boundaries not to cross.
Examples such as taking bribes to get contracts, sleeping with a potential client to get favours or in extreme circumstances using of muti [witchcraft] in order to get more business can dissolve the partnership if such issues are not agreed to in advance.
When done correctly partnerships can propel you to higher and dizzying heights than ever seen before, but if they are not working, partnerships can prove to be fatal and kill the vision and dream you once had.