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Many home-based entrepreneurs are gaining new ground with partnering arrangements. Although it takes many shapes, the core of the partnering concept is two or more businesses teaming up to achieve together what they canít do alone. Partnering with other businesses can help you offer a broader product or service package to a particular market segment, provide the resources to handle a single major project, or organize resources to meet your customersí needs. Whatever the scenario, partnering gives you the image of seamless capacity typically associated with large corporations.
Even though it has been around for a while, donít expect to find fixed rules for individual partnering agreements. With the concept rapidly evolving, some partnerships resemble entities unto themselves; others parallel outsourcing or subcontracting relationships. Some business owners partner only under carefully drawn contracts; others do it on a handshake. Whatís important is developing an arrangement that satisfies all parties involved.
Partnering allows very niche-oriented businesses to serve clientsí complex needs and to compete against large firms that have all the necessary staff in-house. Partnering also allows you to handle a large one-time project without actually hiring employees. Another advantage of partnering is it provides a home-based business the opportunity to grow substantially without having to move to a commercial location.
Get It In Writing
While partnering enthusiasts claim there are no serious drawbacks to the process, you should still proceed with caution, especially in the beginning. Formalize your agreement with a detailed written contract that clearly defines each partnerís role and responsibilities.
The contract covers what each is responsible for and what the compensation will be. It also includes short and long-term goals. The process of drawing up the contract forces you to think things through and be sure both are on the same page before starting. A business relationship is like a marriage-it takes work and sometimes you have to compromise. Just like a marriage certificate doesnít guarantee a happy relationship, a contract doesnít guarantee a successful partnership.
Even so, a contract can provide the foundation of a mutually beneficial business relationship and give you processes to end the alliance should that become necessary.
Think about all the things that could go wrong and how you would deal with them. What if one of the partners wants out? If the partnership splits up, who keeps the clients? Who signs contracts? How will you handle a situation where one partner fails to fulfill his or her obligation?
Consider the issue of liability not only from the legal perspective but also as it pertains to image. What happens if one of the partners either performs poorly or fails to perform at all? An attorney can review your agreement and advise you so youíre protected against legal liability, but you may still be putting your reputation at risk. Take the time to get to know a prospective partner, gain confidence in his or her abilities and reliability, and check references.
Where do you find good partners? Theyíre pretty much everywhere. Clients may also serve as the catalyst for a partnership, or contacts may be made through various networks.
As successful as partnering can be, donít rush into it. Define your niche and your client base, and develop trust with your clients first. Once your business is established on its own, then look for ways to enhance it through partnerships.
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