What Makes Business Partnerships Succeed? By Arnold Matimba
Business start-ups can be daunting, for example choosing whether to form a partnership or go it alone as a sole trader. Not all entrepreneurs are cut out to work in a partnership, but there have been some success stories, including Microsoft, Twitter, and Apple, which were formed by individuals with productive relationships.
Long-time friends, old school mates, or relatives build most partnerships and the key is in recognizing individual strengths and weaknesses. Most importantly the partners respect what the other brings to the partnership. Most partners have gone to run companies that have revolutionized the world.
Apple: When Steve Jobs and Steve Wozniak met in 1970, Wozniak was building a computer and Jobs saw a business opportunity to sell it. One had technical skills and the other business foresight to turn the computer into money. Today Apple Inc. designs and sells consumer electronics, such as the iPod, the iPhone, the iPad to name just a few.
Twitter: Evan Williams and Biz Stone worked together at Blogger before Google acquired it. Their mutual respect, ambition and camaraderie helped to keep them together and achieve business success. Today Twitter has over 500 million active users generating over 340 million tweets daily and has become one of the most visited websites.
Microsoft: Bill Gates and Paul Allen were childhood friends with a passion in computer programming. Their partnership succeeded because they shared an obsession in computers and passion for business. On 25 June 2012, Microsoft announced that it is paying $1.2 billion to buy the social network Yammer.
In order for a partnership to work the following must be adhered to:
Written and signed partnership agreement A lawyer qualified and well versed in business partnerships must draft the legal agreement. Every obligation must be clearly defined and written and agreed upon by all parties.
Shared capital instead of expenses Agree on an arrangement where expenses are shared in an associative arrangement, it makes it easier to walk away when things go wrong.
Integrity Ensure the person you are partnering with is full of integrity and is upright and has not spiraling debts that will tempt him/her to use company money.
Exit Strategy In the partnership agreement, define the exit strategy that allows either party to walk away from the partnership.