By Christine Deutsch (Sarina Russo Entrepreneurs Business Coach)
Starting a business is a big step and including a partner to share the business journey with may be something you’re considering. Having someone who can support, compliment and challenge you can go a long way to creating that formula for business success.
What is a Partnership?
- Two or more people who operate a business together generally through a Partnership Agreement who distribute income or losses between themselves.
Why would you want a business partner?
- To bring additional skills, experiences & resources to the business
- It can be cost effective
- To share control & management and to share the load
- To share the profits & losses, and there are tax benefits
- Operational flexibility – allows time for partners to take breaks
What are the disadvantages of a partnership?
- Personal liability – your partner’s fault is your liability too
- Decisions about what happens when the partnership ends
A business partnership is not unlike a marriage. It requires:
- A shared vision and goal with values & strategies that are aligned.
- Mutual hard work with each partner using their respective strengths to grow the business.
- Open communication & effective conflict resolution – a business lives in a dynamic environment and there will be stormy seas and tough times to navigate.
- Mutual respect and a balance of power that recognises the contribution of each partner
- A 'business divorce' can be just as messy as a marital divorce – a partnership agreement with clear lines of responsibility during the business partnership & the splitting up of assets after the business partnership ends may help.
The essential traits of a potential business partner:
- They bring complementary skills & experience to the business
- They share your values, entrepreneurial spirit & vision
- They offer resources & credibility to your business
- They are financially stable, without a lot of personal baggage & are reliable
- They practice good personal & business ethics
- There is mutual respect and clear communication ie they are willing to be accountable and solution oriented.
Successful business partnerships:
- Proctor & Gamble – brothers-in-law related by marriage started by combining their two businesses - soap making and candles. From there, they developed other personal & cleaning products including shampoos & dishwashing.
- Hewlett Packard – university classmates creating electronic circuitry equipment and branched out personal computers and electronic calculators.
- Ben & Jerry’s – high school mates who opened their first ice cream ‘scoop shop’ in 1978 with their now signature flavours including Chocolate Chip Cookie Dough and a string of franchises worldwide.
- Larry Page & Sergey Brin – launched Google in 1998 – is there more that needs to be said!
- Paul Allen & Bill Gates – high school friends and co-founders of Microsoft. Allen died in October 2018 reportedly giving more than $2 billion towards advancement of science, technology wildlife conservation & supporting the arts & community services.
Not 100% sure you will be able to create a startup successfully?
We offer accredited small business training that can help turn your business idea into reality. Sarina Russo Entrepreneurs (SRE), in conjunction with The Self-Employment Assistance program (previously New Business Assistance with NEIS), enables Australians to set up and run their own small business. The Self-Employment Assistance is 100% Australian Government funded.
Sarina Russo Entrepreneurs (SRE) supports candidates as they complete BSB40320 Certificate IV in Entrepreneurship and New Business. During this, candidates create a comprehensive business plan and a two-year financial cash forecast. SRE Trainers provide meaningful mentoring for the first twelve months.
Eligible candidates receive the training and support to create a viable business plan, in addition to obtaining a Certificate IV in New Small Business.
For more information, please click here.
Sources:
http://www6.austlii.edu.au/cgi-bin/viewdb/au/legis/nsw/consol_act/pa1892154/
https://businesstown.com/shows/building-startup-team/choose-right-business-partner/
https://articles.bplans.com/6-traits-to-look-for-when-choosing-a-business-partner/
https://www.thebalancecareers.com/choose-the-perfect-business-partner-3515781
https://business.gov.au/planning/business-structures-and-types/business-structures/partnership
