Is friendship beneficial in a business partnership?
Although having great chemistry is an essential element in every business partnership, being friends outside of the business is not alway beneficial. The co-founders of Pocket Change, a startup that created a universal rewards currency accumulated through apps on your phone, are convinced that having boundaries has made their partnership last. Dividing work and private life can indeed be an advantage. If partners get can’t separate both, there is a high chance that one might take things a little too personal. Here are four ways to manage your business partnership:
- Getting a mentor or presenting your business ideas to a third party can help you get a different perspective on things. Getting an objective opinion on your day-to-day business decisions can be invaluable and eventually prevent conflicts with your partner.
- Having a written agreement will be the foundation for your business partnership, comparable to your business plan for the company. A partnership agreement identifies potential sources of conflict. It also defines how much time and resources each partner invests in the company, strategies for growth, payment policies, responsibilities and exit strategies.
- An integral part of the partnership agreement, or so-called Operating Agreement, is defining roles and responsibilities. After having those clearly outlines on paper, you should meet on a regular basis to discuss each other’s workload. While individual strength should be considered in this process, communications is key to avoid any misunderstandings and make adjustments as needed.
- Be reasonable when you negotiate about money or hiring decisions. It’s always useful to mention the long-term benefits for the company when you want to get your partner on your side. It’s also important to stay calm and reasonable when you sit down at the negotiating table.
Are you thinking about starting a business partnership? Learn more about our unique 4-step process for creating Operating Agreements.