As a serial entrepreneur and business consultant, I am interested in the unique dynamics of business partnership. Follow me to read my personal experience in partnership and learn more about how other partnerships set the ground for cooperation and compensation; how they promote harmony and resolve conflicts; and what tools business partners use to develop their relationship as their business grows. Despite all the effort and good intentions, the partners simply cannot agree. Plan for the worst and make sure your partnership agreement offers a method of dispute resolution. This may include the use of the services of a third-party intermediary or the interests of an arbitrator`s decision. Like strategic partnerships, strategic legal alliances offer companies a number of benefits through legal agreement, including additional resources, manpower and brand power. Using a written partnership agreement to formalize your joint venture avoids personal grief along the way, as it allows you and your partners to agree on how to deal with certain situations before they occur. It will improve the day-to-day functioning of your partnership and prevent problems from escalating into extreme crises. Recommendation agreements are probably the most fundamental and informal type of strategic alliances, but strategic marketing partnerships can be much more complex. This can be an unwelcome surprise if you and your partners have a very different approach to day-to-day tasks and decision-making. All in-depth partnership agreements provide a detailed description of how business is managed and, most importantly, how important decisions are made. Some partnerships operate on the principle of the majority rule, while others follow a consensus model. One way or another, your approach must be defined in the agreement.
Partnerships can be complex depending on the size of the activity and the number of partners involved. The creation of a partnership agreement is a necessity to reduce the potential for complexity or conflict between partners within this type of business structure. A partnership agreement is the legal document that determines how a business is managed and describes the relationship between the different partners. As has already been said, disputes are inevitable in all respects. In business dealings, disputes can be blocked and even require mediation, arbitration or, unfortunately, legal action. Try to avoid the time and cost of litigation by requiring mediation and arbitration as the first (and hopefully definitive) solution to commercial disputes. There are many ways to resolve disputes so that your partnership agreement can list alternative dispute resolution methods. The aim is to formally identify these methods of solution in advance and include them in the partnership agreement when all heads are cold and clear. “I suggest that formal partnership agreements be entered into when solo practice companies develop into a partnership or ensembles,” said Rich Whitworth, Director of Corporate Consulting at Cetera Financial Group.