Business Principles
Undiluted but Simplified
John’s and Simon’s success has been and continues to be fuelled by several factors. The most important of these factors
are the underlying basic principles of partnerships no matter the industry in which they are to be found. We expound on
these principles below. (Source BizStats.com)
Have The Same Vision:
For a partnership to be successful, all parties involved must
agree on the same strategic direction of the company. If one
partner wants to build a national chain of retail outlets and the
other would just like to earn a decent living, the business will
fail in no time. Set a clear agreed course for the business that
meets the needs of both partners.
Define Business Roles:
A winning business partnership capitalizes on the strengths and
skills of each partner. Divide business roles according to each
individuals strengths. E.g. one partner may be strong in marketing, operations and finance, the other sales, human resources
and leadership.
Avoid the 50-50 Split:
It may seem logical and fair to split the share of ownership into
an equal 50%. However, this ownership structure can impair
decision making in the future. Instead of having decisions stalemated, consider a 49% to 51% split. If this is not possible, an
outside board for bigger issue disagreements can help your
company from being deadlocked on decisions.
Hold A Monthly Partner Meeting:
A strong business partnership is built on an
open communicating relationship. Meet on a
monthly basis to share grievances, review
roles and provide constructive criticism.
T
he road to entrepreneurship can be lonely.
Greater rewards may result
from forming a business
partnership
artnerships offer more
freedom for business
owners with shared business tasks and the potential to earn greater profits
partnership business
can be a relationship
disaster or a positive experience
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Create A Partnership Agreement:
It is simple to set up a partnership because
no legal documents are needed. Partnerships are often an oral agreement between
two or more parties. Potential problems can
be averted down the road by drawing up a legal partnership
agreement.
A
Pointers to picking your partner in business
Trust
– knowing that your partner will
have your back and you will have
his/ hers – in good times and bad times
Have it on
paper – if it relates
to the business, put it on paper, that way,
even in your absence, professionalism
comes first to all and second none.
gray lines –
personal is personal and
business is business. The two shall never
walk hand in hand to a beautiful sunset –
especially when emotions come into play.
No It
is a partnership not an
employer – employee relationship – when
you began, both of you brought something
equally important to the table, respect each
other’s contribution, even in a 80:20 partnership. You can’t make 100 without the 20!
Communicate
Openly – Argue,
consult, agree, concede, retreat, bet, haggle
and reach a consensus. It is the only way to
appreciate each others thoughts and values.
Contents of a Business Partnership Agreement
What should be covered in a good business partnership agreement? According to the Small Business Administration (SBA),
the agreement should include the following:
Amount and type of investment by each partner e.g. partner
A brings in a cash capital of Kshs. 5,000.00, the second partner brings in a capital of baking equipment.
Type of business – one partner may be good with
marketing skills and the other excellent at baking. Th P