It’s an exciting moment in the life cycle of a startup when an entrepreneur decides to establish a partnership. Businesses that create partnerships together are able to align with like-minded brands that support and enhance each other’s services. This helps create partnerships that are mutually beneficial to both partners. Over time, one successful business partnership can lead to the creation of many more partnerships.
However, before we get ahead of ourselves, let’s go back to establishing a business partnership.
Should a Side Hustle or E-Commerce Business File for Incorporation?
What kinds of expectations should each party put into place to ensure a successful business partnership?
Why are you partnering with this business? It may seem like a basic question to ask, but the way your business answers this question might differ from how the business partnering with you answers it.
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If you were forming a partnership business structure, this would be the ideal time to begin drafting a written partnership agreement. This document covers key details concerning each partner’s roles in a partnership structure. Some of these details including the term for when the business partnership begins, the daily responsibilities of each partner and rules for admitting new partners.
You may find it’s beneficial to establish a partnership agreement, which should outline the following items:
Partner needs
Use this section to identify some of the strengths and weaknesses of each business.
Note that “weaknesses” does not necessarily need to have a negative connotation. Perhaps there is an offering or service your customers wish your business had available, but you do not have the bandwidth or ability to offer it. However, the company you’re planning to partner with does have this offering within its suite. Similarly, the company may be partnering with you because you have an asset that it doesn’t have, allowing each business to better balance their strengths and resolve weaknesses.
Partnership goals
What are some of the expectations you have for establishing this partnership? It may be wise to create a list of short- and long-term goals, depending on the life cycle of the partnership.
Some partners work with businesses for years on end. This is often due to the initial success of the partnership and getting in sync with meeting customer needs. Other partnerships may be seasonal or established for short-term promotions. For example, you may partner with a social media influencer to create and share content about a new product you’re launching. This may help get the new offering in front of a relevant audience and increase its sales and site traffic.
Strategy
How will each party collaborate and work together to reach these mutual goals? Once a goal has been established, it’s time to outline objectives that become part of the company’s strategic plan.
For example, let’s say you are partnering with a business to increase your brand awareness. The business you partner with may encourage creating visibility with inclusion in their company newsletter. This newsletter reaches a large target audience and carves out a space for you to share relevant messaging and offers created specifically for these customers.
Consistent communication
It’s not a good idea to establish a business partnership and then step away under the impression that the partnership will naturally take care of itself on its own. Once the partnership has been set up, follow up with your business partner. You might schedule a quick, set meeting time each week or send out a weekly report via email for everyone to review together. Discuss how the partnership is progressing and the types of KPIs you plan to measure from the partnership on the analytics side. Take thorough notes during each meeting, and send to all attendees afterward to ensure it remains on track.
Share your vision
A few years ago, a partner gifted me with a book that proved to be a valuable resource in how to think bigger and differently in business. This was more than a gift or even recommended reading. The partner that gave me this book had a vision of expanding our partnership together and knew this book could communicate that vision.
As time progresses in your business partnership and you become comfortable with working alongside a like-minded business, take the time to share your vision with them. Where do you see your business in five years’ time? What kind of role do they play in helping you get there? Share this vision with your partner and encourage them to share their vision, too. Doing so will not only further build your rapport together, but it will allow you to plan for the future with a fantastic partnership right by your side guiding the way forward.
Originally published Aug. 9, 2021.
