Partnerships: Proceed With Caution
This month’s theme is “all in the family,” and it’s worth pointing out that any business partnership requires many of the same elements that form family bonds. We spend a lot of time with a business partner, our values need to be aligned, and we need to trust that person.
Whether it is a solid partnership or a toxic partnership, this relationship has an enormous impact on the business, the team, the patients, and your own person happiness.
There are advantages and disadvantages to partnership in business:
Advantages: Brain trust; shared costs; shared responsibilities.
Disadvantages: Each partner is liable for the partnership debts; risk of disagreements; liable for each other’s actions; loss of full control.
Seventy percent of business partnerships fail. The keys to a successful partnership include clear expectations and shared short-term and long-term values.
Below are some steps to nurture a current partnership or take steps to enter a successful new partnership.
Steps To Partnership Success
A.Existing Partnership
Take the time to check in and ensure that you and your partner(s) are aligned and that expectations are clear.
Schedule an annual partnership review. Consider the guide below and have each partner complete it prior to the review meeting.
If you struggle with communication in your partnership, consider getting support from a third party to have open honest communication, and set up communication resources for going forward.
Partnership Review Guide:
What do you feel is going well with our business? What more would you like to do more of? (Consider: staffing, patient care, marketing, finance, work/life balance, and operations.)
What areas of our business could we improve on, and what would you like to do less of? (Consider: Staffing, patient care, marketing, finance, work/life balance, and operations.)
Are you happy with the partnership arrangement and our level of communication?
Has anything changed for you in terms of priorities and goals?
What are your goals for the next year to five years?
B. Adding A Partner
Choosing a partner objectively is key - we may be tempted to partner with friends or family, but a business partner needs to bring more to the table than a personal relationship.
Potential Partner Assessment:
Start with the big picture and work out details. After you are confident that it is a good match, it’s a good idea to have this facilitated by a third party.
Why are you looking to become a partner?
On a scale of 1-5, how much of a risk taker are you, 5 being high risk.
Prioritize the following: work/life balance, patient care, and financial results.
What are your goals and vision for the practice and your role? How much time are you committed to?
How big (or small) do you think we should get? Think about locations, associates, staff, and volume.
What will it look like if one of us wants to take time off or a leave of absence?
When do you think you want to retire? What would your exit strategy be?
What is our plan if things do not work out? What will we do so we can both walk away okay?
Do you clearly understand how and how much you will be paid by the business?
We will have disagreements. What guidelines will we have in place to resolve them?
If this assessment proves that you are aligned, get more into the details with a formal partnership agreement. A partnership agreement is necessary regardless of how well you know your partner. Contact us to find out more about what to include in your agreement.
Partnerships can be a beautiful thing when parties are aligned and expectations are clear. If I can help facilitate this, please feel free to reach out.
Nancy Dewald is a business development professional, workshop facilitator and optical industry veteran who founded and is CEO of Lead Up Training & Consulting, a company specializing in identifying business gaps, implementing solutions and developing leaders.
Article as seen in Optical Prism