According to the small business administration (SBA), over 70% of all small businesses are owned by one person – a sole proprietor. People naturally love to own all the profit alone. On a lighter note, since they want to eat alone, they will most likely die alone just like some people will say.
But do you know that despite the increasing numbers of self-owned business, greater rewards may result if you form a business partnership with an individual who complements you both personally and professionally.
There are only a few partnership businesses in Nigeria compared to what we have in some developed countries. Aside from this, there are a lot of advantages partnership brings that you probably might not be aware of.
Someone once said that
Partnership offers owners a collaboration. You have someone to share ideas, responsibilities with, and an additional arm to lift the business up. Some businesses would have grown and expanded if only they had entered into partnerships.
Lots of questions must be running through your mind right now. Questions like:
- Who is this partnership advocate?
- Doesn’t she know that partnership is risky and not as rosy as she is describing it?
Of course, partnership has its risk but it is applicable to any other type of business. I am aware of the two sides of the coin.
Microsoft started with partnership.
We all know the founder of Microsoft, Bill Gates. The company, Microsoft, actually started as a partnership between Bill Gate and Allen Palmer. Microsoft is now a multinational company with an improved features on the Microsoft package every single year. Microsoft is a success story of a partnership. (Winks)
I remember my days in the secondary school where we had classes on types of business; there was a whole lot of list ranging from a sole proprietorship to partnership, to public limited liability et cetera. In my little inexperienced mind, I wondered why sole proprietorship was always everyone’s preference. I always had this interest to try out a partnership venture.
In recent years, much after tertiary education. An opportunity emerged to have a business deal with a friend. It all started with an idea to sell wears in terms of fabrics, sandals, and slippers. We pulled our equal resources, purchased the goods, and started making sales. The business strived tremendously to our utmost surprise. I had my first-hand share of partnership and I would love to share the lessons I learned for newbies or other partners. Also, I failed to mention that it was not a smooth ride but it was worth the trial. Besides, do not neglect the days of humble beginning.
Tips to Scale through the Fears of Partnership
Partnership has its hurdles just like any other business. You might think that sole proprietorship is still something you want to venture into. It is all fine, you still need these tips as you would have team members, employees, and sponsors at some point. So there’s still something you can learn.
- Interest: Before you venture into a partnership deal. Ensure you have the same interests, goals, and a positive mindset. Please don’t ever consider entering into a partnership deed with someone that has a conflicting interest, as such partners will encounter a lot of conflicts and head to the rocks. To elaborate more on the same interest, you both must see the same need, agree on the problem-solving mechanism before taking steps to collaborate.
2. Transparency: Mirror what you want to see. It’s not an individual business but two independent individuals fusing into one. There must be a hundred percent openness. Eliminate secrets when it involves the business as it’s not healthy. Both partners must be able to speak about everything. Remember you’re one, so it’s not one-sided. Transparency helps to eradicate assumptions as most times, assumptions turn out to be wrong.
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3. Record keeping: This is easy to avoid as a lot of us love to commit things to memory. It’s good to take the pain to pen information and keep records as it helps to eliminate wrong figures, memory loss, or assumptions. You know accurate records can be trusted as it stands the test of time, serves as a future reference, gives a formal structure and foster checks and balances. So let this be a drive for you.
4. Tolerance: Well this is as important as the earlier. Tolerance is accommodating each other flaws. Definitely, everyone has differences that comprise of strengths and weaknesses. Most of us, love to identify with the strengths but let’s learn to tolerate the weakness. The weaknesses could include a domineering attitude, too conservative. Please, not all weaknesses should be overlooked. Some weaknesses are detrimental to both individual and business-like integrity, lack of punctuality, rigidity. Those weaknesses that are disastrous should be amicably stated, to encourage improvement.
5. Open communication: Everyone needs to communicate, even babies communicate and they’re understood. Communication simply means to send a message to a person to get feedback from the receiver. Any communication without feedback is not healthy that’s why you should never undermine the importance of open communication. A good rapport between two people helps to minimize discord.
I know people who live with the excuse of “I am an introvert. It’s not my nature to talk”. Well, you don’t have to be an extrovert to have an open communication with your business partner. The vital thing is to speak up whenever crucial matters involving the business is mentioned. Outside the business, you can maintain your introverted nature. In all, communication is key for a smooth sail in business.
6. Legal Structure: This is a formal method where the partnership is well-structured and becomes recognized as a legal entity. It could be attained in various forms where an agreement is drafted, it could be handwritten for a startup stating the terms and conditions of the partnership duly signed by both parties which makes it a workable document. Ensure both parties have a copy.
The standard means of formalizing a partnership is to have it duly registered under the country’s Corporate Affairs Commission (CAC). By doing this, it goes beyond a closed-door partnership to a government recognized legal entity. This step helps to eliminate informalities and create an appropriate business structure liable to be funded by financial institutions.
In summary, Partnership is worth it after all as it has greater rewards. You know one will chase a thousand, two will chase ten thousand. Having to collaborate with someone of the same interests may be the long-time answer to the growth and expansion you desire. Let’s consider the likes of Steve Jobs and Steve Wozniak the founders of Apple, Larry Page and Sergey Brin who invented Google, Evan Williams, and Biz stone who invented Twitter. They all have successful results.
You might be the next big bomb when you discover the right business partner. Everyone doesn’t need to be a sole proprietor.
Thanks for reading through. Well, I look forward to your constructive feedback in the comment section as I would love to know your thoughts. And please share this article on your favourite social handles. Click on the icons below to share easily.
Your Favorite Partnership advocate.