Building a Partnership 

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Building a Partnership

Successful business partnerships are more than just cost-sharing operations.

FROM: NOV-DEC 2007 ISSUE | BY MARK WARDELL

What do I need to know to lay the groundwork for a successful partnership?
Many CGAs choose to bring partners into their practices rather than going it alone. A partnership provides all parties involved with the security of team expertise and the benefit of sharing the expenses of running a firm. And it can be a rewarding way to do business.

However, partnerships are not easy to develop and, like any relationship, can go south without a solid foundation. In fact, according to Ken Richardson, CGA, of Evancic Perrault Robertson, a national group of public accounting firms, 80 per cent of failed partnerships are due to the fact that the partners set up their firm as a cost-sharing operation rather than a true partnership.

“An effective partnership happens when the individuals involved bring totally different characteristics and skill sets to the partnership,” says Richardson. “They must agree on their differentiated roles and responsibilities. Simply sharing office space and divvying up administrative costs is a recipe for a break up, as I’ve witnessed countless times.”

Get the Right Fit

If your objective is to develop a true partnership, you need to find someone who brings a different skill set and different personality type to the table. Agree to take ownership of different tasks with the overall goal of meeting the needs of your client base. You may be great at generating business and managing relationships, while your partner may be better at overseeing files. To determine whether you and your potential partner are a good match, Richardson recommends doing a personality profiling test.

Take Care of Legal Matters

After you find a good partner, make sure to have an official partnership agreement drawn up to legally spell out terms you both agree with. This document should outline, among other things, the duties and responsibilities of each partner, the agreed area of practice and specialties, office hours/days of operation, the size of the operation, and the future plans for the firm, as well as the terms of dissolution of the partnership in the event that course of action is ever required.

Plan for the Future

Finally, as you proceed with your new partnership, remember that you are building a business, not just offering accounting services. To be successful, you need to develop a strategic business plan that projects what you want your partnership to look like five years down the road. This critical step will help ensure both partners synchronize their goals and benchmarks.

I also recommend seeking advice from a professional advisor. Have the advisor review your business plan, identify any weaknesses, and help you put systems and strategies in place to provide a roadmap for the success of your new partnership.

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