When it comes to entrepreneurship, most people want to build a business that will designate them as being “self-made” or “Sole Proprietorship“. What this means is that they did everything on their own and without help from anyone else. But any successful entrepreneur will tell you that success cannot be gained by doing things alone. It is impossible to be a truly “self-made” individual. You need others to provide you with the resources or connections you do not possess. It is a take-and-give process that allows you to attain the success you desire.
So no, you cannot do everything alone. This brings into question whether you should create a sole proprietorship or develop a partnership company when starting a business. This is a very important decision to make because it sets the foundation for how your business will operate. Either you make all the decisions, or you have someone else you must consult before a final decision is made. With this in mind, you must decide if a partnership makes sense for you.
Partnerships can be hard for most people to endure because you are bringing completely different personalities together for the purpose of following a shared purpose. This can create complications if opposing viewpoints cancel each other out, rather than coming to an agreement that leads to growth and prosperity. Think about how many partnerships have failed in the world, e.g., a business or marriage.
This is not to say that partnerships cannot work. When partners truly recognize that their skill sets complement one another, they can work towards building a partnership that helps the other succeed. This takes recognizing that you can be great when teamed up with the right partner. There are numerous partnerships that have created a great business that have gone on to change the world. A few of these partnerships include the following: PayPal, Google, eBay, Apple, and Microsoft – all billion-dollar companies that have shaped the world.
The thing about a partnership is that it takes a shared mindset to achieve goals. The tricky thing is that you do not know if your partner possesses this desire, even if they have communicated they do. But business is risky, so a partnership is just another risk that you hope turns out well.
The following article will help you create a business partnership that has the chance to succeed and flourish. Read on to learn how you can ensure your partnership is built to last for the long-term.
What is the definition of a business partnership?
A business partnership is a contracted agreement among individuals coming together to form a working relationship. As a partnership, these individuals agree to share any profit or losses incurred, liabilities, assets, and investments. As the definition states, when you enter into a partnership, you and your partner(s) act as one. Each decision that is made by an individual partner will be shared by the collective partnership as a whole.
With this information in mind, you must first be sure that you chose the right partner(s). That means vetting your potential partner before coming to an agreement. You want to be sure that the partner you choose not only has the skills to produce results but also understands that their actions can positively or negatively affect the partnership. This is important because you want to avoid having to dissolve a partnership due to the working relationship not being productive. A failed partnership can become a very messy problem that often becomes difficult to resolve on mutual terms.
Related read: Singapore limited liability partnership registration »
Communication is the key to a successful partnership
If you want to build a successful partnership, there must be great communication in place. Communication is how people share their ideas, opinions, and problems. As an individual, you are not going to always share the same viewpoint as your partner, but you must communicate with them to come to a mutual understanding. If you decide to just hold in your thoughts, this behavior can lead to issues becoming bigger over time.
One thing to remember is that communication is a two-way process. Listening is just as important as talking. Both partners must listen to one another’s viewpoints in order to understand each other’s feelings. This helps to create a working relationship that is productive and successful. When you know exactly who your partner is and how they function, you can put forth the actions that help both of you achieve your shared goals. This is how successful partnerships work.
Have a shared vision
When you form a partnership, you and your partner are sharing a business that can either succeed or fail. Of course, success is the objective but that can only be realized if each partner understands how it will be achieved. Before entering into the partnership agreement, it is important that each partner shares their long-term vision, and define the expected roles and responsibilities and ideal working relationship. This helps to set the foundation of how the business will operate before you get it started.
One of the reasons most partnerships fail is because the partners did not discuss the important details of how the relationship would work before opening their business. They just wanted to rush the process because of the potential opportunity to make money. But in reality, the ability to make money on a long-term basis is not possible if problems arise in the future that disrupt business operations. Therefore, you must discuss all aspects of your potential partnership before entering into a contractual agreement.
Related link: 12 Ways to Get More from Your Business Relationships »
Be sure that you are in it for the long-term
Just like a marriage, a business partnership should be something that you envision being a long-term commitment. If you do not see this as being the case, it is probably wise that you forgo forming a partnership. The reason is that a partnership is a legally binding contract that can cost you a lot of money to dissolve. To avoid having to deal with such an issue, it is best that you choose a partner you can see yourself working successfully with for many, many years.
Set the framework early on
You and your partner must set the framework for how the partnership will operate before moving forward with establishing business operations. It is important to know how the business will be financed, how financial responsibilities are shared, and how profits will be divided. Money plays a big role in business, which is why it breaks most partnerships up. Be sure that the finances are understood upfront before moving forward.
Have a united front
In order for a partnership to work, each partner must be supportive and understand the expectations of one another. Operating a business is not an easy effort. There will come difficult a time where your confidence is shaken due to unforeseen challenges arising. In order for your partnership to succeed during these trying times, there must be a shared unity in place that works to overcome any obstacles presented. It is about having the ability to succeed together, rather than trying to do it all on your own individually. This is what separates the successful partnerships from those that fail.
If you are thinking about forming a partnership, be sure that you choose a partner who can help you create a successful business. Remember that the key to a great partnership is communication, setting expectations, defining roles, understanding finances, and working as a united force.
Read more: How to Grow Your Business »
Starting a business partnership?
Let us assist you with the Singapore company registration. Our integrated ecosystem will ensure the incorporation process is done fast and right.