The Future Of Partnering

Partnering between home-based businesses is a natural result of corporate downsizing. Many professionals who have left large companies and started home-based businesses are successful and don’t want to return to the corporate world, but they recognize the need for and benefit of alliances.

Partnering will continue to gain respect and recognition among home-based entrepreneurs seeking top talent for short and long-term business needs. Across the scope of business today, joint-venturing is in. When it comes to partnering, the home-based business has an advantage in flexibility, overhead structure and unique sources of talent. In other words, getting together to combine the best of talents, the best of direction and the best of enthusiasm is a win-win situation, period.

A couple of examples would be: you partnering with real estate agents, and brokers in regards to lease purchasing; or to use a specific company for inspections or clean up of the property. Or contracting with a web designer to design pages for your clients.

Tips for Effective Partnering

Choose your partners carefully. Be sure they have the skills and abilities you need, and share your level of commitment. Define the scope of the partnership. Are you working on an equal basis, or will one of you function as the managing partner? What roles will each partner play? How will the compensation be calculated and distributed?

Put it in writing. A detailed, well-crafted partnership agreement prevents misunderstandings, memory lapses and future conflicts. Develop and stick to an operations plan. How will the work actually happen? How and when will the partners interact?

Plan for the unexpected. How do you plan to handle problems and resolve conflicts? If a partner wants to dissolve the agreement, who ends up with what?

Set a minimum “no exit” time period. New ventures take time to become productive. Make a mutual commitment to stick with the partnership long enough to give it a chance to prove itself.

So, who do you want to partner with?

Partnering For Progress and Growth

Many home-based entrepreneurs are gaining new ground with partnering arrangements. Although it takes many shapes, the core of the partnering concept is two or more businesses teaming up to achieve together what they can’t do alone. Partnering with other businesses can help you offer a broader product or service package to a particular market segment, provide the resources to handle a single major project, or organize resources to meet your customers’ needs. Whatever the scenario, partnering gives you the image of seamless capacity typically associated with large corporations.

Even though it has been around for a while, don’t expect to find fixed rules for individual partnering agreements. With the concept rapidly evolving, some partnerships resemble entities unto themselves; others parallel outsourcing or subcontracting relationships. Some business owners partner only under carefully drawn contracts; others do it on a handshake. What’s important is developing an arrangement that satisfies all parties involved.

Partnering allows very niche-oriented businesses to serve clients’ complex needs and to compete against large firms that have all the necessary staff in-house. Partnering also allows you to handle a large one-time project without actually hiring employees.

Another advantage of partnering is it provides a home-based business the opportunity to grow substantially without having to move to a commercial location.

Get It In Writing

While partnering enthusiasts claim there are no serious drawbacks to the process, you should still proceed with caution, especially in the beginning. Formalize your agreement with a detailed written contract that clearly defines each partner’s role and responsibilities.

The contract covers what each is responsible for and what the compensation will be. It also includes short and long-term goals. The process of drawing up the contract forces you to think things through and be sure both are on the same page before starting. A business relationship is like a marriage-it takes work and sometimes you have to compromise. Just like a marriage certificate doesn’t guarantee a happy relationship, a contract doesn’t guarantee a successful partnership.

Even so, a contract can provide the foundation of a mutually beneficial business relationship and give you processes to end the alliance should that become necessary.

Think about all the things that could go wrong and how you would deal with them. What if one of the partners wants out? If the partnership splits up, who keeps the clients? Who signs contracts? How will you handle a situation where one partner fails to fulfill his or her obligation?

Consider the issue of liability not only from the legal perspective but also as it pertains to image. What happens if one of the partners either performs poorly or fails to perform at all? An attorney can review your agreement and advise you so you’re protected against legal liability, but you may still be putting your reputation at risk. Take the time to get to know a prospective partner, gain confidence in his or her abilities and reliability, and check references.

Where do you find good partners? They’re pretty much everywhere. Clients may also serve as the catalyst for a partnership, or contacts may be made through various networks.

As successful as partnering can be, don’t rush into it. Define your niche and your client base, and develop trust with your clients first. Once your business is established on its own, then look for ways to enhance it through partnerships.