Planning a business partnership? Questions to ask.

Catch 22. The solo journey as an entrepreneur and business person is limited because it doesn’t invite the principle of synergy, where 1 + 1 = +100. Yet partnerships and collaboration are often hard.

Here are some questions you might want to ask before you press ink to contract.

  1. What is your purpose for doing this partnership/project? Your real purpose? The reason you get up in the morning?
  2. How important is this purpose?
  3. Let’s just test the purpose. If someone came to you and said here is $500,000,000 for you/your business, but I want you to do “x” which is very misaligned to your purpose, what would you do?
  4. If the business is really struggling, and you could pivot left, but left would violate your purpose, what would you do. (I mean violate, not just change course)
  5. Is there any circumstances you can think of that you would violate your purpose? (To save the life of a child for example?)
  6. What is the strategy for achieving the purpose?
  7. How flexible is the strategy? Is it able to be adjusted as circumstances change? And if so, what is the engagement of the partners in the contribution and design of both the strategy and the proposed changes?
  8. Are there any decisions that will be made without all partners engagement and consultation? If so what, and why?
  9. How will be handle any upset and conflict?
  10. What are the rules, and how do we make sure everyone plays them in the same way?
  11. What are the agreements, and how do we monitor them, learn from mistakes and adjust as needed?
  12. How do we be clear on roles and responsibilities and how are these assigned?
  13. What is our decision making process? If there are more than 2 partners, do we go for unanimous vote, or majority, or something else? What happens if a decision gets stuck?
  14. How do we handle the money? Who has access to the books, accounting etc? Who can authorize what to be spent on what?
  15. How do we handle and agree on salaries or remuneration?
  16. Who carries the burden of ensuring the business is able to meet salary payments?
  17. What does partnership mean?
  18. What does collaboration mean? Examine both of these with each other to be sure everyone is on the same page.
  19. How does someone exit the partnership? And when they do, how do we consider the various domains of their value contribution, such as if they have introduced clients who have brought in exponential financial and social capital value to the business? Discuss the various scenarios.
  20. What is more important? Maintaining a healthy relationship between partners and co-collaborators, or the business?

I could go on. But these are the hard questions that will enable an exploration of the typically unexplored questions.

Once these questions have been deeply considered by all parties, a simple agreement may be drafted, prior to any legal agreement. This agreement might form the basis of the legal agreement. When we agree to use a very specific method of conflict resolution, prior to any form of legal action, most disagreements can be managed in a very mature way.

I have a saying, if you get into a shark tank, you better be a shark. Translated. Don’t do business, especially partnerships and collaboration, with sharks. (Unless you are a shark) Taking time to really explore the foundations of the relationship is crucial to the long term health of any partnership.

Here is a template for an agreement we crafted for Big Blue Sky event, which is licensed under the Creative Commons License, Big Blue Sky Trust.

I work with people who seek to partner and collaborate on facilitating the partner agreement. Given I have many different tools that might be used, the time and effort you can potentially save on getting the partnership relationship right is immense.

*Disclaimer. I am not a lawyer. I do not do legal agreements. I do human to human agreements based on trust and taking the time to explore the relational dynamic and expectations. There is no guarantee that your partnership will not deteriorate into a legal mess, however, if deployed in full, it is unlikely that you will reach this place if you take the time to get the foundations in place. Almost always, people skip this step. Big Mistake.

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