What is a Business Partnership Letter?
A business partnership letter is a document that shows your intention to have a joint venture with another business person. This letter states how the business can help its potential partner in one way or another.
How to Write a Business Partnership Letter?
In a 2015 article of the Census data, 2.2 million firms or 8% of the entire business sphere are partnerships. While some business partnerships are successful, others are not. Making a request to merge with another business starts with a business partnership letter. If you're looking for ideas in writing such a letter, go over our tips below.
1. Describe the Business
Give your potential business partner an introduction to your business. Describe what you do and how you gain money from the business you have. You can include your company's mission to make this part of the letter convincing.
2. Show the Benefit
Since you have the intention to join forces with another business, state how this venture can benefit both of your businesses. Give at least a clear compensation scheme and a few benefits of your upcoming business relationship to convince your potential partner to merge businesses.
3. Identify Challenges
You have to understand that proposing a business partnership always comes with a few challenges. Identify those challenges and explain how you're going to address them together in the sample letter.
4. Prompt a Response
Get a response from the other party by saying that you attached a business proposal for them to go over with. Give your contact information and tell them that you're looking forward to work with them in the future. Lastly, keep a proper format and tone for your letter.
What are the types of business partnership?
The types of business partnerships are:
1. General partnerships - This partnership commonly becomes valid when the business activities start.
2. Limited partnerships - This kind of partnership gives one party with unlimited liability than the other party.
3. Limited liability partnerships - Only certain kinds of professional service businesses can create these partnerships. These businesses include architects, doctors, dentists etc.
Why is a proposal important in a business partnership letter?
Attaching a proposal is important in a business partnership letter so the other party can review the status of your business. In this document, you need to include the new business structure that you'll be forming, numbers and figures that prove the current standing of your business, and other necessary information regarding the partnership.
What are the advantages of a business partnership?
The advantages of a business partnership are:
1. Low cost of operations
2. More money to use as capital
3. More people who can decide for the business
4. Easy establishment of the business
What are the disadvantages of a business partnership?
The website Entrepreneur listed these disadvantages of a business partnership:
1. Financial problems
2. Different management styles
3. Personal habits
4. Setting boundaries
5. Level of commitment
6. Differences in skills and roles
When do you terminate a business partnership?
You terminate a business partnership when the other party does not want anything to do with the business. The termination is not easy though as it undergoes a lot of legal processes.