When running a business with one or two partners, any of the following scenarios may present themselves:
One partner insists on hiring a key employee whom another partner dislikes.
- A partner is sued for sexual harassment.
- The company receives an unsolicited buyout offer from a competitor.
- The company runs out of money.
- An ongoing personal or family crisis interferes with the ability of one partner to perform.
- One partner suddenly loses interest in the business.
- A partner is caught stealing from the company.
At Liverix.com, our single-minded focus is on fostering business partnerships between entrepreneurs on a global basis. We provide a convivial environment for you to find business partners from across the world, to help you grow your business. There are many business books that focus on manager-employee relationship, but none on the relationship between business partners. “The Partnership Charter” by David Gage addresses this critical gap in the market.
Why is it so important to have business partners? According to a study by the Marquette University which the author alludes to, an overwhelming majority of hyper-growth businesses across the world – as much as 94% – are run by two or more business partners working in unison. Individual owners run only 5% of hyper-growth businesses and as many as 50% of slow-growth businesses. This should indicate why forming business partnerships is so important.
However, it is a fact that most entrepreneurs are wary about picking up partners. They fear for their independence and believe a conflict is never too far away. There is also a problem with mismatch in expectations.
What the Partnership Charter focuses on is addressing issues of conflict that may emerge between business partners. Conflict between business partners is inevitable – what’s important is to have a system in place to resolve them amicably as and when they develop. This is the point author Gage stresses on.
Business relationships are not the same as personal relationships – they lack the same kind of emotional ties and there are clear boundaries drawn between the partners, based on their individual stakes in the business and responsibilities undertaken by them. Gage suggests having a written charter, called the Partnership Charter, which establishes a clear line of demarcation and a broader set of requirements expected from each partner for the sake of the business.
Essentially, the Partnership Charter, so developed, aims to develop ground rules for the business and a guideline for how the partnership is to operate. It also suggests rules for determining the ownership stakes in the business and how much control each partner will have in the decision making. Also, the Partnership Charter will dictate how money is to b distributed between the partners.
Business partnerships are complex and always dynamic. In this book, David Gage clearly brings out the nuances of establishing a business partnership. A business partnership need not be tense or prone to conflict – it can be one filled with perfect understanding and mutually beneficial to all concerned, provided there are a certain ground rules in place. We certainly recommend this book highly to all members of the Liverix community.