The Performer’s Guide Forums Think Like a Business Key Business Partnerships

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  • Krystin Railing
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    Key Partners are the relationships that you have with other business, governmental, or non-consumer entities that help your business model work. These can be the relationships that your company has with your suppliers, your manufacturers, business partners, etc

    Answer these questions:

    • Which partnerships are critical to our business?
    • Who are our critical suppliers?
    • Which of our suppliers and partners are sourcing our key resources?
    • What type of partnerships would suit our needs?
    • Who are your current partners?
    • What resources are you acquiring

    Types of partnerships

    • Business partnership
    • Joint ventures
    • Strategic Alliance
    • Supplier/ Buyer

    Business Partnership Agreement:

    A business partner may offer many benefits for your business including:

    • Expertise and Knowledge
    • More Cash
    • Cost Savings
    • More Business Opportunities
    • Better Work/Life Balance
    • Moral Support
    • New Perspective
    • Potential Tax Benefits

    The agreement details each partner’s level of involvement. Your business partnership agreement should include the following:

    • The business’s purpose
    • Percentage of ownership
    • Partner contributions
    • Allocation of profits and losses
    • Who can bind the partnership
    • Decision-making power
    • specific responsibilities
    • Management duties
    • Resolving disputes
    • Authority
    • Voting rights
    • The death of a partner

    Clearly outlining the roles of each business partner reduces confusion and disagreements

    A partnership agreement isn’t required to form a general partnership and doesn’t have to be filed with your state, but it’s a good idea to keep on your records when disputes arise.

    Write a business partnership agreement before signing any legal paperwork or documentation.

    Roles Matrix:

    The Roles Matrix aka Responsibility Assignment Chart describes the participation of each business partner, by assigning various roles in completing tasks for a project or business process.

    RACI is an acronym used to describe this chart, derived from the four key responsibilities most typically used:

    • Responsible
    • Accountable
    • Consulted
    • Informed

    Benefits of the RACI model:

    • Clarifies roles and eliminates confusion
    • Keeps projects on track and ensures nothing falls through the cracks.
    • Ensures smooth transitions and handoffs when there is turnover.
    • Prioritizes communication between business partners

    Dissolution of Partnership Agreement:

    Deciding to end a partnership is never easy, and to further complicate matters, there are a lot of steps involved in dissolving one.

    The reasons for dissolution might be:

    • Project term ended
    • Low cash flow
    • Irreconcilable partner disagreements
    • Avoiding fines and fees
    • Avoiding continued liability

    Steps to dissolving your partnership:

    • Review your partnership agreement
    • Discuss decision to dissolve with partner(s)
    • File a dissolution form
    • Notify others
    • Settle and close out all accounts
    • Know it may take 6 months or more to finalize the sale of a business

     

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