BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

15 Steps To Take Before Starting A New Business Partnership

Forbes Business Development Council

Starting a partnership can be a great way for business owners to expand their offerings, pool resources and take their operations to the next level. However, before jumping into a partnership, it's essential to carefully consider several factors that can significantly impact the success of the venture, like having shared goals, values, expectations and visions.

Below, a panel of Forbes Business Development Council members provide these and other factors that can prove to be critical for anyone considering setting up a new partnership. By taking the time to address these factors upfront, potential business partners can set themselves up for a more successful and fruitful collaborative endeavor.

1. Know Their Values

Long-term partnerships are about matching values and commonly aligned goals. Before we get down to the aligned goals, it is important to understand partner values at an organizational level as well as at a personal level. Make sure that you would want to work with them in the long term. - Darsh Singh Mann, StartX

2. Define Expectations

Ensure that each party in the partnership understands what’s expected of them. Clearly define timeframes, roles and responsibilities and financial expectations before entering a partnership. It’s also integral for involved parties to have a clear exit plan if the partnership is not working. Each of these critical elements should be considered and secured before the partnership begins. - Jim Mizouni, Sage Dental

3. Lay Out A Partnership Vision

Before setting up a new partnership, it is essential for both parties to be wholly aligned. This can be achieved by clear communication and due diligence in order to eliminate the risk of asymmetrical information. A vision for the partnership must be laid out; it should characterize with utmost detail the synergy of the partnership, as well as indicate exactly how gains or losses will be divided. - Yuvraj Anand, Bliss Anand Group

4. Clarify Non-Negotiables

Be clear on non-negotiables, which means that we have negotiables. Walking into a situation with a zero-sum approach may leave you winning the battle but losing the war. In my experience, not taking the time to reflect on these early enough in the process sets neither party up for success. Ultimately a sustainable partnership needs all sides to have skin in the game. - Nivi Chakravorty, MyRegistry

5. Get Word-Of-Mouth Insights

It is essential to consider word-of-mouth when forming a new partnership. Doing your research and talking to people who have experience in similar partnerships can provide valuable insight and help ensure that the partnership is successful. Additionally, it is important to have a clear understanding of the expectations of each party, as well as any legal implications that may arise. - Vasyl Rakivnenko, IngestAI


Forbes Business Development Council is an invitation-only community for sales and biz dev executives. Do I qualify?


6. Weigh Risks And Rewards

Before setting up a new partnership, consider the risks and rewards. Assess cost, potential risks and potential benefits, making sure the rewards outweigh the risks. Consider long-term viability and potential conflicts of interest. Read contracts carefully and understand the terms. Take proper precautions to ensure the partnership is beneficial. - Naimeesha Murthy, Products by Women

7. Prioritize Trust And Communication

Common expectations and goals of the new partnership, the steps necessary to achieve those goals and the responsibilities associated with those steps should all be part of your business plan and agreement. Trust and communication between the partners are absolutely critical—as is the willingness to disagree, debate and resolve in regularly scheduled communication! - Mladen Kresic, K&R Negotiation Associates LLC

8. Establish Understanding

Partners should have a clear understanding of each other's goals, values and long-term vision. Partners should have a clear division of responsibilities. Partners should have a clear understanding of the financial commitments of each partner and to set up a system for keeping track of finances. Partners should establish open lines of communication and regularly check in so they are on the same page - Dhiraj Chhabra, BuzzClan

9. Prepare For Equal Work

I think business owners should understand that they must be willing to put in at least as much work and resources as their partners. If one believes the partner will bring their sales channel with them and hand over leads with ease, your partnership will fail. If your partner thinks you are the channel to bring them leads without the incredible support from your partner, your partnership will fail. - George Earle, Thoughtworks Inc

10. Start With The Details

Have tough conversations first. Who is doing what, and by when? What expectations do the partners have of each other, and what are they expected to deliver? Don't just dole out equal shares and hope for the best; define benchmarks and vet your partner. - Justin Boggs, Marketplace Valet

11. Consider Both Trust And Skills

A partnership is like a marriage; you'll be sharing ideas, resources, profits and losses. Partner with someone you trust, who shares your values and has the skills to help your business succeed. Set clear expectations and boundaries from the start and be willing to have tough conversations. Partnerships can get messy — but a successful partnership is built on trust, communication and respect. - Sundance Monty Brennan, Nada

12. Create A Partnership Agreement

Having been in a failed partnership previously, I would not move forward without a partnership agreement that states each of your roles in the company. That way, if something falls below or above expectations, there's accountability in place. This will alleviate the all-too-popular assumptions of "I thought you were taking care of that." - Bill Baker, Surface Solutions Countertops Inc.

13. Understand The Other Party's Thinking

Alignment of values is a critical consideration before considering any partnerships or collaborations. Prior to getting down into the opportunities, it is important to try to understand the thinking behind the other party and how each party could potentially value add to each other - Gabriel Tan, GUAVA Amenities

14. Flip The Value Statement

It’s important to understand the dynamics of partnerships as they are not linear. Businesses often consider and understand the value they bring and the value their partners bring. However, what’s even more critical is understanding how your value augments their value, and vice versa, to accelerate each other’s bottom line. It’s flipping the value statement inside out. - Javier Molina, Starburst

15. Be Willing To Own The Relationship

In my experience, a successful partnership needs long-term care and feeding. Often, both sides are initially excited about a partnership, but unless a business leader owns the relationship, the promise of the partnership may not be fulfilled. - Julie Thomas, ValueSelling Associates

Check out my website