The Joys and Challenges of Partnerships in the Construction Industry
There are many construction companies with small staffs and limited cash flow that can greatly benefit from partnering with another company.
When bidding for and delivering a project would be too big for your company to handle by itself, a partnership with a company that has complementary skill sets can mean that acquiring large projects is now possible. Another benefit of partnership is that financial risk can be spread out among partners.
A joint venture can be a great way for your company to grow. Your partner can introduce you to new clients and new markets, which can be particularly helpful if your local market is in a downturn.
Choosing the right partner is very important. All good partnerships begin with trust. Selecting a partner you have successfully worked with in past projects is a good starting point. Be realistic with your partner about what you can and want to achieve together and be sure that all partners involved benefit equally from the collaboration.
Putting a partnership agreement in writing is essential in order to make sure that each partner clearly understands mutual goals and expectations. Openly discussing all concerns before nailing down an agreement can mean fewer problems between partners once a project is underway.
Be sure to include an exit strategy in the written agreement. While partners enter an agreement with only the best intentions in mind, it’s impossible to foresee all the potential problems and issues that can arise once a project is underway. Issues that should be addressed in an exit strategy include how existing projects and clients would be handled and how money is divided among the partners.
The ultimate goal of the written agreement is to make sure that each partner continues to have positive relationships with clients and is not in financial jeopardy once the partnership has ended.
There are many different kinds of partnerships within the construction industry that can be successful. Being open to working with a wide range of professionals offering services quite different from your own can enhance your company’s opportunities for growth in unexpected ways.