Partnership is the coming of two or more people who pull their resources together to form a business. In partnership, business can experience boom as long as the partners agrees on the terms and conditions in the agreement form.
This relationship may however be in terms of contract, exceptionally which the duo may not include third parties. At times, it may also meant to impress customers with a new and refined business idea to gain their loyalty.
Starting a partnership business isn’t just a child’s play, however, before considering partnership in business, there are things you must do.

Why Form A Partnership?

Depending on your reasons for joining a partnership. You must be very sure of the pros and cons of the business. You can’t just start a partnership business just because, the person you are partnering with is your relative, and to you, that reason alone is enough for entering into a partnership agreement. Be sure that you want to expand your business and reach a large customer, that is the major reason you are partnering.

Choosing A Partnership Type

There are two major types of partnership; general partnerships and limited partnerships. general partnership is the type of partnership where the partners manage the company and assume responsibility for the partnership’s debts and other obligations. Whereas a limited partnership has both general and limited partners. The general partners own and operate the business and assume liability for the partnership, while the limited partnership is partially involved in the business activity.

Understand The Nature Of Business

Most questions to be asked before partnering is that, what is the nature of of the business? Does it really worth investing your money or time in(or both)? Are you a professional in that area of business? Do you believe in the person you are partnering with? What is the demand for the product/service by the final consumers? All these questions and more are what you should ask yourself and your proposed partner before venturing into it.

Agree On A Sharing Formula

Though it is not necessary, for instance, for two owners to equally share ownership and authority. However, if you decide to do it, make sure the proportion is stated clearly in the agreement. This will help both parties to know their limitations and their strength in the involvement of the business. Sharing formula at times can break partnership business apart.
But it is generally advisable to let one person lead the business by sharing it at 60/40 or 70/30 formula respectively. However, you can bring in a third party with at least 1% stake in the business, in order to have a fall back.

Formulate A Legal Partnership Agreement

Most small businesses fail due to lack of what type of agreement method to adopt. Once the decision is made to start a business together, you should create a written partnership agreement with help from a lawyer and an accountant. You must adopt this concept no matter whom your partner is. People tend to trust their families more and try to give some level of trust. That’s a big mistake. Get a written agreement first. The agreement should address the purpose of the business and the authority and responsibility of each partner.
If one wants to quit the business for instance, it can state that the other partner must buy him or her out for a pre-negotiated percentage of the business’ value. All these has to be stated clearly in the this agreement form.
Every agreement should address four crucial issues: Financing the business, compensation plan, exit clauses, and roles and responsibilities of each partner. It must also include who owns what percentage of the business, who is investing what, where the money is coming from, and how and when partners will be paid. However, the reason more emphasis is being laid on the agreement pattern is because, it is the most essential part of partnership business.

Carry Out A Proper Feasibility Study

In addition to the above, you must carry out a business feasibility study. Your feasibility study carried out concerning the business matters. This will definitely help in understanding the market situation, demand for the product/service, possible effects on consumers, etc. It should also involve your business plan because, it is your business plan that will explain the vision, mission and the objective of the business. And as long as the statements in the plan continues to ring in your mind, it will help you to actualize your ultimate goal of making profit, in as much as it affects lives positively.

Start The Business

The next stage is to start up the business properly after putting all the above into cognizance. Expect challenges at start up because the partnership or conglomerate is new. Look for areas you can actually make improvements by increasing your productivity and doing good marketing research. For instance, if you are considering doing a partnership on setting up and running a newspaper/magazine company, you and your partner(s) should have basic knowledge of how to run a company, e.g. newspapers, manufacturing or banking etc. This is the primary stage of business management.
At the secondary stage of management,  each partner should have a specialization or know his or her area of expertise. That is, the first partner could be an expert in Journalism while the other is a chartered accountant. The combined effort an experienced Journalist and a chartered accountant will both be useful to start, run and manage a Newspaper/Magazine Business.
Perhaps you are about starting a partnership business, it is a good idea. However, the only issue is that you must understand the pros and cons of the business so as not to regret your move. It only takes determined and faithful partners to excel in this type of business endeavour. Being an expert in your career is another key issue to consider. If the business must triumph, there must be two or three professionals pulling their resources (experience and capital) together.