Posts Tagged ‘Partners’

Understanding When It’s Time to Develop a Board for Your Small Business

?????????????????????????????????????As your business grows, you may seek additional input and support from others outside of your company. If you’ve reached that point, it might be beneficial for you to consider starting a Board. Whether it’s an Advisory Board or a Board of Directors, having the experience and insight of a well-rounded group of individuals can help you take your small business to heights you couldn’t have realized on your own.

The Difference Between the Two

There are two kinds of Boards you can consider developing: an Advisory Board or a Board of Directors. An Advisory Board includes a panel of people that have experience that can help guide you to making decisions for your company. A Board of Directors takes that one step further and has the power to vote on those decisions. If you incorporate your business, you’re required to have a Board of Directors, though you may not hold more than the required number of meetings. If you have shareholders you’ll also need a Board of Directors, as they’re the body that act in the interest of the shareholders.

How to Cultivate a Fabulous Board

Whichever type of Board you want to develop, here are a few ground rules to get started.

Start by determining what you hope to achieve with your Board. We’ve already covered the situations where you’re required to set up a Board of Directors, but if you want an Advisory Board (and you can certainly have both), you need a purpose and direction. Maybe you want to take your private company public, and want the right people on your team to guide you to success. Or maybe you want to enter a new industry that you know little about. Having experts in that field on your Board can help you navigate that transition.

Next, get the right people on board. (Pun. Get it?) Aim to find people with experience different than the rest of your Advisory Board or Board of Directors so you have a balanced panel. For example, you might invite one accountant to help with the financial side, one industry expert, a marketer, and a strategist. If you can find a well-known industry leader willing to participate, that’ll be great PR for your company.

You want to set expectations early so that potential members know what’s expected of them. How often will you meet? Will they be required to participate in email or phone call conversations between in-person meetings?

Then, set compensation. Board members are often shareholders, so they get compensated partially or completely in stock. For Advisory Board members, you might only pay for meals in meetings, or you might offer a stipend for their time. Remember: they are giving you some of their valuable time, so consider a fair and appealing compensation plan.

Developing Relationships Over Time

You may only meet with your Board once a quarter or once a year, so make sure to maintain communications throughout the year so they feel in touch with your business. Send a monthly newsletter updating them on what’s happening at your company. Check in with a phone call or coffee date occasionally. Ask if there’s anything you can do to help them. It’s important to make this a reciprocal relationship so they want to stay on your Board for years to come.

When It’s Time to Break Up With Your Partner

????????????????????Not every business partnership is meant to last forever. Some partnerships start off well, but as the company evolves, it outgrow its usefulness. Here are the typical bad signs of an impending breakup:

1. Respect and trust are fading.

The basis of any partnership is respect and trust. You may no longer respect the skills your partner brings to the company. You may no longer trust your partner to deliver the results that are needed to be successful. You may be hearing things from other employees about what your partner is saying behind your back. 

2. Your skills are no longer complementary to your partner.

You may have gained their skill or other employees in the company may have picked it up and excelled at it. Either way, your partner’s talents no longer seem so critical to the success of the company.

3. Communication has broken down.

You no longer talk to each other. It seems like the only conversations you do have are via email, text or through other intermediaries.  The talk keeps moving away from the goal in your business to one that is getting too personal. Every conversation with your partner seems to end in an argument. 

4. You disagree on how to spend money.

You and your partner now want to invest company resources in different things. Perhaps you want to reinvest in growing the business and he/she wants to harvest by taking much of the profit out.

5. You want to work on different things.

You no longer agree on the strategic direction of the company and it keeps the team divided. In fact, more and more there seems to be two teams inside the company- yours and his/hers.

6. You think you work harder than your partner.

In the early days, it was the two of you all the time. You continue to grind away at the business, but it seems like your partner is kicking back a bit too much and is never in the office.

How to transition:

Breaking up is always hard to do. Start by communicating the obvious and review the six points above with your partner. Discuss privately each other’s view on the problems. Agree to keep employees, customers and vendors out of this private conversation.  Look for resolutions. Consult your shareholder agreements for buyout procedures and other remedies. Go to an advisor that you both trust to help with the transition.

How did your breakup go with your partner? What were the first signs?

Nextiva Tuesday Tip: 4 Ways to Be a Win-Win Negotiator

Whether you’re negotiating with a potential client or partner, a disgruntled customer or an employee, there’s a right and wrong way to negotiate. The right way: Create a win-win result where everyone feels satisfied and positive about the relationship. The wrong way: Focus on getting what you want at the expense of everyone else. You may win the battle, but you’ll lose the war. So how can you create win-win negotiations? Here are four tips.

  1. ???????????????????????????Know your limits. What are you prepared to concede and what is non-negotiable? Knowing this going in will help you negotiate more effectively. For instance, in dealing with an angry customer, you may be willing to concede to waiving a return fee or giving a partial discount, but not willing to comp the whole transaction.
  2. Listen—really listen—to the other side. After all this time spent thinking about what you want from the negotiation, your mind is buzzing with information. But to negotiate successfully, you’ve got to quiet it down so you can pay attention to what the other person is saying. Listen for the unspoken desires, such as wanting to feel important or wanting to be treated fairly. Often, what isn’t said is what matters most.
  3. See the big picture. Don’t focus so much on this specific negotiation that you lose sight of the long term. If gaining what you want from the negotiation means losing a customer, is that worth it? Perhaps it’s better to make more concessions than you planned if the ultimate outcome will be worth it.
  4. Be patient. Take time to think through your statements and weigh your options. Don’t be afraid of silence—if you feel the need to fill every moment with talk, you’ll likely end up giving too much away. You may also need to be patient enough to table the negotiation for now and come back to it later, when both parties have had time to think or to cool down.

By following these four tips, you’ll find your negotiations going more smoothly and leading to better results for all involved. 

Work Your Biz Wednesday: How to Sell to Corporate America

If you're running a small business, it's important to secure long-term contracts. Learn how to do business in corporate America in this week's video from Melinda Emerson, the Small Biz Lady.

Mondays with Mike: Finding a Business Partner

What should you look for when searching for the ideal business partner for your organization? Mike Michalowicz, author of The Toilet Paper Entrepreneur, breaks it down for you in today's "Mondays with Mike" video: 

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