The Key to Creating a Lasting Business Partnership
Investing in property or flipping houses, whether you take on one address at a time or you’re always working on dozens of spaces, can be tricky work. While you may be able to tackle a ton of work yourself, no successful business works in a vacuum.
Building successful, long-lasting business partnerships doesn’t happen naturally however. To cultivate relationships that are fruitful for everyone, you need to be smart about how you build those relationships and who you build them with.
Use this guide to learn more about creating a lasting business partnership that can help everyone involved grow.
Understand the Benefits of a Business Partnership
Many property investors and house flippers tackle a bunch of different tasks during the course of an average day. Though you may be well-versed and able to wear multiple hats, a strong partnership can bring more to the table than you can alone.
Here are some of the top benefits of a real estate-based business partnership:
• A partner can help bring more capital to the table, allowing your business to grow and take on work that you otherwise might have to pass on. In property investing, a lack of capital is often a serous impediment to growth. A partnership could dramatically extend your working capital.
• A new partner can expand your network and general reach. A well-connected partner will have many relevant contacts just like you do.
• You’ll get more flexibility when it comes to handling profits and losses. This can help you come tax time as well.
• A savvy partner can help analyze potential projects and weigh in with another perspective. This two heads is better than one mentality is particularly important as your business grows and takes on more projects.
• Your portfolio will be much more impressive to potential clients. By pairing with the right partner, you should practically double your portfolio of work and have more to show. This is particularly beneficial if both partners have a similar amount of work experience in the field.
• You’ll have help! With a partner, you don’t have to do everything alone. This can allow you to focus on the parts of the business where your expertise is truly valuable.
Vet Partnership Wisely
Partnering with another individual or small business can allow you to do things that you simply could not on your own. This could be because of increased capital or just more manpower. You need to vet each partnership wisely though so you don’t end up in a sticky situation with a partner that brings your brand down.
Here are some tips to help you vet partnerships wisely:
• Trust your instincts. Choosing a partner can be tricky, but at first, your instincts are your best guide. Remember that you’ll need to work with any partner that you pair up with, likely on a daily basis. If you don’t have a comfortable relationship, day-to-day activities may be strained because of it.
• Pay attention to the numbers. Your instincts are a valuable resource when vetting potential partners. However, once a business passes the smell test, it may be time to put your instincts in the back seat and let the numbers do the talking. After all, a successful business partnership should look good on paper too.
• Have your accountant look over any financial information submitted to you. You’ll want to pair with a financially viable company. Otherwise, you’re hiring employees and not developing a true partnership.
Creating Beneficial Business Relationships: A Checklist
Creating a business partnership can help your company in a variety of ways. Ensuring that your partnership is successful from the start requires a little forethought on your part. Here are a few tips to help you achieve your goal of creating the ideal business partnership:
• Partner with other businesses that represent your core values. While any two businesses that team up want to increase revenue, you need to be aligned and on the same path to truly succeed. Discuss how you plan to grow and succeed to make sure your two businesses can form a proper partnership.
• Stay flexible at first. Partnerships, especially if you’re talking about individuals or very small businesses, often take shape slowly. Instead of being too proactive about assigning roles, allowing a partnership to unfold naturally can ensure that the partnership really plays to everyone’s strengths.
• Aim to partner with people that offer something you can’t. This could be capital, clients or a contact list. It could also be a partner who can tackle tasks that you can’t if you’re building new property or flipping homes.
• Create the proper agreements before moving forward. You’ll need to create and sign a partnership agreement before any work can officially begin. You can use a template or create a more thorough contract as needed. You can do this for a long-term partnership or one-off jobs.
Building a fruitful business partnership can help with working capital, growing your portfolio and delegating tasks so everyone can work more efficiently. Before you can create the ideal partnership, you’ll need to vet anyone you’re considering working with thoroughly. You’ll also want to involve your accountant, attorney and create a partnership agreement for anything formal.
While it can seem overwhelming, a partnership offers a proven path to growth. Just make sure you take the right steps in the proper order so everyone involved can succeed.