The eBusiness/Business Partnership
A business partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor, or skill, and expects to share in the profits and losses of the firm.
In a Partnership, two or more people share ownership of a single business. Like proprietorships, the law does not distinguish between the business and its owners.
However one thing a partnership needs is an openness
and trust between the partners.
Without this in place the partnership is doomed to failure.
It is important
that
all of the Partners should have a written legal agreement that sets forth how
decisions will
be
made, profits will be shared,
disputes will be resolved.
As to future partners and how they will be admitted
to the
partnership, and how partners can be bought out, or what steps will be taken to dissolve the partnership when needed.
Maybe it’s hard to think about dissolving a business when it is just getting started, but many partnerships split up at crisis times and unless there is a defined process, there will be even greater problems. They also must decide up front how much time and capital each will contribute, etc.
A partnership is like a ship setting out to sail around the world, where it will face
all sorts of danger and rough weather. It will need the trust and team
spirit, of all concerned
for it to arrive safely at its destination.
Advantages of
a Partnership
• Partnerships are relatively easy to establish; however time should be
invested in developing the partnership agreement.
• With more than one owner, the ability to raise funds may be increased.
• The profits from the business flow directly through
to the partners'
personal tax returns.
• Prospective employees may be attracted to the business if given the incentive to become a
partner.
• The business usually will benefit from partners who have
complementary skills.
Disadvantages
of a Partnership
• Partners are jointly and individually liable for the actions of the other
partners.
• Profits must be shared with others.
• Since decisions are shared, disagreements can occur.
• Some employee benefits are not deductible from business income on tax
returns.
• The partnership
may have
a
limited life; it may
end upon
the withdrawal or death of a partner.
Do you know
why business planning is the most important factor
determining business success?
If you are
already familiar
with
business
planning then
you will
already realize the importance of having
a continuous evolving
plan for your business.
If
not then we will discuss the benefits to you and your business of having
such
a plan in motion.
1. A good business plan regularly
updated will give you a reality check on the performance
of your business. Seeing figures in black and white can stir you into taking action by remindingyou what you had originally planned.
2. Good planning will take in the concept of continual research
into making
your
business more profitable and more efficient.
A continually updated business plan is like focusing on the different programs on a television screen, which are continually changing.
So eventually
you get a better idea of what is actually
happening inside the structure of your business.
3. With a business plan you have to learn and become proficient in the many
different aspects of the structure of your business. By the nature of your involvement in your business plan if you ever need expert advice on any part of your business then you will already be familiar with its workings.
4. Many people who run a business
do not like focusing on many of the parts
that
go to make a business
plan
a success. This is a false way of having the finger on the pulse of your business.
By
being involved and familiar in the
planning of your business you literally have to take part.
5. The contacts and the people you meet while writing and researching your business plan will give you untold opportunities later as contacts
to help expand your business. Every contact can be a potential customer.
Do you know
where to find the information about your intended customers or target market?
1. It’s probably the most difficult
part of your business,
trying to figure out
where your customers are going to come from, but it is one of the most important. That’s why the supermarkets like Walmart and Tesco always do market research about an area before they even contemplate building a
superstore there.
2. Unlike most large companies who employ market research companies you may not be able to afford their costly investment. However all successful
businesses need to have a close understanding of potential and existing customers and the marketplace they work in.
3.
This understanding allows you to target customers, sell effectively, and
compete with other suppliers and spot new opportunities. Performing market research on potential customers and your competitors will help you to gain this vital knowledge.
4. You can build a picture of general trends using published market information -
from free government statistics and data to paid-for market reports from commercial providers. Your own contacts and sales
records, if you have any, can also be a great resource.
5.
You can add to your knowledge by using field research
- from surveys and discussions to product tests - to investigate customers'
attitudes and examine questions specific to your business.
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