The Partnership Charter Book Summary - The Partnership Charter Book explained in key points

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The Partnership Charter summary

Name: The Partnership Charter
Author: David Gage

David Gage

How to Start Out Right With Your New Business Partnership (Or Fix the One You’re In)

(6 ratings)

13 mins

Table of Contents

The Partnership Charter
summarized in 7 key ideas

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What’s in it for me? Discover how to create and nurture a really solid business partnership.

The “break up” of Facebook founders Mark Zuckerberg and Eduardo Saverin is now the thing of both movie and internet legend. The duo’s acrimonious split not only led to a lengthy legal fight but also cost them their long-term friendship.

Business partnerships don’t have to be like this.

Yet if you ever start a company with a friend or colleague, there are a few things worth considering before you start that will save you a lot of trouble – and potentially heartache – down the line.

Saving the tough things for tomorrow may work for lots of things in life, but as these blinks will show you, when it comes to creating a sustainable business partnership, that hard talk today will mean lasting success tomorrow and in the future.

In these blinks, you’ll learn

why honesty is not only good manners but also good business sense;
how pre-dawn frostbite almost broke Ben & Jerry’s Ice Cream; and
how control might be worth more than cash when it comes to a fair partnership.

Discuss important matters with prospective partners, ideally before you’ve started working together.

Going at it alone isn’t an easy path, which is why so many entrepreneurs find a business partner.

But a business partnership doesn’t always succeed. And although such relationships are rewarding and profitable when they do work, a failed partnership can potentially ruin your life.

On the other hand, working with someone else makes it much easier to start and run a business, as you can combine skills and share responsibilities. And that’s exactly why Inc. magazine’s annual list of fastest-growing companies is chock-full of partner-led enterprises.

Yet the downside is that a partnership gone wrong can have devastating consequences. Even in the best-case scenario, when partners manage to work out disagreements privately and avoid litigation, the costs of lost job satisfaction is huge. And that doesn’t even begin to cover emotional damage, either.

That’s exactly why you should discuss all the details with a prospective partner before committing to a business relationship. Although you can never be fully certain whether a partnership will blossom or wither, it does help to discuss important matters, ideally before you’ve started working together.

To that end, take advantage of the Partnership Charter.

We’ll look at three key aspects of communication with a business partner, considering business details, personal relationships and future development of your business.

These steps are easy to follow, and at the end, you’ll have a written charter documenting each partner’s goals and expectations. There’s no better way to start a partnership correctly!

Partners have to agree on a mission, a vision and a strategic direction for the business.

Let’s jump in! On the business side, partners should start a conversation by agreeing on the mission, vision and strategic direction of the company.

Your company’s mission articulates what your company does, for whom and for what reason. This can be captured in a mission statement.

Decide which role each partner will play, and figure out how you’ll divide ownership of your firm.

How would you establish matters of ownership and engagement with a business partner? Like most people, you’d probably create a legally binding document.

Although important, a legal document only covers a fraction of what you should actually consider before embarking on a business partnership.

Partners should agree on how to handle future profits and governance. Who gets what, and when?

Building a business that lasts long enough to be profitable is not easy. In fact, it may seem impossible at first. Yet partners still need to agree on what will happen when their business eventually succeeds.

Division of profits is one important point. Do you want to earn money through a salary, through dividends, an exit strategy or something else? You’ll need to take different factors into account.

Rigorously evaluate your behavior and openly discuss personal values with your business partner.

Whether two people get along often seems a matter of chemistry. But it’s not just that alone: plenty of research has shown that you can do concrete things to improve a business partnership.

Partners should start by rigorously evaluating their own behavior to ensure a good work atmosphere.

Partners should communicate expectations openly and honestly to prevent future resentment.

Being open and honest isn’t easy. But you still have to strive to be open and honest! This is especially true if you’re in a business partnership.

It’s crucial to talk openly about expectations with your partner to avoid disappointment down the line. Consider that an Inc. magazine poll revealed that the majority of people who don’t believe business partnerships are effective blame “unmet expectations.”

To build a partnership that can weather any storm, prepare for the unexpected.

No matter how many honest discussions you have with your partner, you can’t plan for everything.

And yet, you can and should do just that: prepare for the unexpected.

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What is The Partnership Charter about?

The Partnership Charter (2004) describes how business partners can avoid lasting damage to a business relationship by making sure to talk openly about everything. Using a tested process, business partners can put aside differences and successfully build a strong company together.

Best quote from The Partnership Charter

Partners sink or swim – together.

—David Gage

Who should read The Partnership Charter?

Start-up founders
Coaches or communication experts advising business founders
Leaders struggling in a current business partnership

About the Author

David Gage is a clinical psychologist, an adjunct professor at the American University Kogod School of Business in Washington, D.C. and the founder of BMS Associates, a mediation and consulting firm.

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