WHAT TO CONSIDER BEFORE ENTERING A RETAIL PARTNERSHIP
It is a common adage that two heads are better than one. As aptly opined by Helen Keller, Alone we can do so little; together we can do so much." As a retail business owner, partnering with another retail business has the potential to help you reach your business goals faster. However, before entering into such a partnership, you must consider a few things.
1. Identify your prospective partner.
Just like a relationship, the initial choice of business partner is crucial to the success of the partnership. Before you pick that partner, you must check to see whether you have similar aims and objectives, otherwise, it might be an unfruitful venture for both parties. A few questions to ponder on include:
a. Do you share similar values? Will you both fundamentally be moving in the same directions?
b. Is this person/business trustworthy and reliable?
c. Is it going to be a short term or long term relationship?
d. What does your prospective partner have to offer?
e. What do you have to offer them?
For more questions to answer before forming a partnership, read this article here
2. Have a clear and concise agreement
After identifying your prospective business partner and you have stated your intentions, it is extremely important to reach a very clear, straightforward and detailed agreement regarding the terms and conditions of your partnership. Forming a business partnership is more than just two people with complementary talents "teaming up" to work together and there may be legal implications. A poorly written and researched general partnership agreement can open you up to personal liability. Here are a few specific terms necessary in a partnership agreement:
a. Name of the Partnership: There are several different types of partnerships, and you can include the type in your partnership's name.
b. Name the partnership doing business as (if different): For example, a partnership might do business under several different names for different kinds of services offered.
c. Term (length) of the partnership: A partnership can be perpetual or for a specific term length.
d. Purpose of the partnership: What activities are the partnership engaging in? What products or services will be sold? How will new products or services be added?
e. Types of partners in a partnership: Some partners may have more day-to-day duties (general partners), while others may just contribute and have limited participation.
f. Contributions of each partner, in cash, deferred contributions (installments), property (including intellectual property), and service.
We recommend that you hire an experienced lawyer to help form the other important terms and conditions of the agreement partnership.
3. Communication is key.
For any relationship to thrive, the parties involved must be willing to communicate. In a retail business, decision making is almost a daily activity. Hence when forming a business partnership, it is important for both parties to always inform their partner about the decisions being made.
Each partner needs to have the option to advise and give consent. And each partner needs to listen to the customer and not themselves or just each other. There’s nothing better than being on the same page as you reach for the same goal. If you are looking to form a business partnership, you must be ready to communicate.
P.S; If you have a fear of commitment as a retail business owner, you can start small. Instead of plunging into a huge long term partnership, you can opt for collaborations instead. Organize events, giveaways, parties with other businesses and you just might achieve your desired results.
That’s it, folks! I hope these tips were helpful. Have you ever been in a business partnership before? If yes, how did you go about it? What lessons did you learn? Kindly share in the comments section.