Great Partner Communications is a Key to a Great Partnership
Wednesday, February 25, 2015
Add Comment
Great partnerships are the product of many factors including the right control mechanisms, the right voting rights, the right past experiences, the right capital resources, the right level of trust and confidence, the right priorities, and the right contacts. However, one area that often does not get the attention it requires is open, frank communication among partners as a key ingredient.
For investors understanding the relationship between the managing members or partners may prove paramount to the success or failure of the partnership. The good news is many of the key ingredients are easily measured and reviewed from business plans, operating agreements, personal financial statements, and by spending time with each of the key partners. Unfortunately, one of the most difficult is the issue raised by this article - the open communication between partners.
Investors assets can be put at risk should tax liens impact one partner and the others are unaware and can't act proactively to contain the situation. If the partners are not open about their economic situation a partner's developing or existing weakness may remain masked resulting in growing or excessive risk for the investments underway.
For investors understanding the relationship between the managing members or partners may prove paramount to the success or failure of the partnership. The good news is many of the key ingredients are easily measured and reviewed from business plans, operating agreements, personal financial statements, and by spending time with each of the key partners. Unfortunately, one of the most difficult is the issue raised by this article - the open communication between partners.
Investors assets can be put at risk should tax liens impact one partner and the others are unaware and can't act proactively to contain the situation. If the partners are not open about their economic situation a partner's developing or existing weakness may remain masked resulting in growing or excessive risk for the investments underway.
While not necessarily part of the partners' current situation insisting on and completing background and credit checks are a good starting point assuring the honesty and integrity of the various managing partners.
The most effective means for looking into this is to check the partners goals and objectives for an investment. Verify their views of cash position, reserve requirements, expense management, hiring and firing, marketing, and so on. Disparities in perspective and requirements may signal issues. Also, look for discontinuities between financial statements, resumes, contacts, and experience from a give partner and as perceived by his fellow partner. See if the partners have an apparently complete view of the partners private and business life. A complete current view of common goals, personal assets, personal situation, interests, business relationships, and so on is the best indication that the partners are being fully honest, open, and truthful with each other.
Understanding and verifying the relationship, the honesty of the relationship, the transparency of the relationship between management partners is an area investors must focus attention and time on. Not only should this be measured at the point of investment, but if possible, this should be checked intermittently throughout the course of an investment. Conditions and relationships change creating a changing risk environment for investors.
The most effective means for looking into this is to check the partners goals and objectives for an investment. Verify their views of cash position, reserve requirements, expense management, hiring and firing, marketing, and so on. Disparities in perspective and requirements may signal issues. Also, look for discontinuities between financial statements, resumes, contacts, and experience from a give partner and as perceived by his fellow partner. See if the partners have an apparently complete view of the partners private and business life. A complete current view of common goals, personal assets, personal situation, interests, business relationships, and so on is the best indication that the partners are being fully honest, open, and truthful with each other.
Understanding and verifying the relationship, the honesty of the relationship, the transparency of the relationship between management partners is an area investors must focus attention and time on. Not only should this be measured at the point of investment, but if possible, this should be checked intermittently throughout the course of an investment. Conditions and relationships change creating a changing risk environment for investors.
0 Response to "Great Partner Communications is a Key to a Great Partnership"
Post a Comment