Introduction
When it comes to business, many factors determine the success rate. Among these factors are many roles and positions that help to regulate the same. Moreover, the business industry depends on these roles for strategic and systematic functioning. We understand that these roles are divided into multiple categories and further subdivided too. All the more, for businesses pairing with other companies, there is an added number of roles. These are to ensure coordination and two-way communication between the partners. To develop mutual understanding there are roles assigned for overlooking both companies. One of these, a rather necessary position is that of a managing partner. In this article, we are going to see about Managing Partner Salary
Managing partner salary- overview
If one had to guess the meaning by clubbing the words together, we understand that it has something to do with managing and getting together. And rightly so, a managing partner is meant to unite the potentials of both companies to complete a unified project. This article focuses on the meaning, duty, and job description of a managing partner. Also, find the salary and the factors affecting the same of a managing partner.
What is a managing partner?
Let’s understand the title first. A managing partner is one of the core members of any project. Companies engaging in partnerships will always have a managing partner. They function as the CEO of the company and unitedly of the project as well. They carry out duties just like any other manager or CEO. However, these may be a little twisted considering the position to be for a partnership. It is up to the managing partner to consider their own company and the partner’s interests as well. Managing and coordinating with the partners are the primary tasks of a managing partner. Ensuring the goal is fulfilled to its best is a managing partner’s duty. They also link together their company and the partners and unbiasedly work for the best of both sides.
Need for a managing partner
As mentioned above, a managing partner is of utmost importance in any partnership or LLC. Why then, is this position so crucial? What is expected of the person acquiring this position? Find their duties and importance below:
Management & ownership
One of the primary tasks of a managing partner is to act as a manager and owner simultaneously. This means handling all activities and taking the onus of the project itself. The managing partner is also somewhat responsible for the members and their roles in the partnership. They define the strategy and approve it before it can be taken to the heads and worked upon. Other than this, they are also to constantly review and manage the client’s instructions and implement the same in the project.
Strong leader
When you’re in a partnership, the companies coming together require a single leader. Without a leader, it becomes tough to maintain coordination and work together. Each company would do its duties and simply try and put them together. This wouldn’t yield the best results. Therefore, to fully exercise the meaning of a partnership, managing partners act as unified leaders to direct both companies or partners under a single command. Rather than taking two routes to reach a result, managing partners direct one common path where both can come together and work.
Effective communication
There must be ample communication between the partners while the project is in progress. Moreover, the number of departments under each partner will also require information to go to the other side. If there is little exchange or one-way communication, it may lead to misunderstandings and greatly affect the result. Therefore, there is a crucial need for a managing partner. Being in constant contact with both partners and knowing the strategy of each, can ensure effective communication. Furthermore, being updated about both sides, they can offer their suggestions to avoid consuming time over unnecessary communication.
Handling other departments
Even if a company were to handle a project single-handedly, there are so many departments. Designing, finance, review, security, and so on. The list is endless and therefore, someone needs to guide them. For partnerships, the same is doubled, and having a mixed group of both partners is all the more necessary to have managing partners. They can devise a single strategy to hand over to departments to avoid confusion. They can look after each department and their needs and guide them accordingly. This is better than having to report to many people.
Balance between companies
When two companies with diverse ideas and values come together, there is a need for balance. One cannot rely on one company’s morals and sources more than the other. This would give a biased result and result in conflict among partners. This is a big no-no when it comes to partnerships. Therefore, there are managing partners to maintain this balance. They are responsible for distributing duties as per the abilities of each company. They must also blend the talents and values of the company in proportion to achieve the best possible result.
Financial aspects
When the budgeting and finance of both companies come together, either company may not be trusted to handle it alone. To avoid any doubt, the managing partner oversees the financial aspects. One may count this as one of their major duties. They equally distribute and collect the revenue and from the budget. Salaries, budget plans, expenditures, all are handled and supervised by the managing partner. They must ensure no bias and look for the best interest of the project. The project always comes first and while company owners may tend to lean in favor of their own companies, managing partners are free of this issue.
Legal aspects
Another important factor apart from finance is the legal aspect of the partnership. There has to be some mutual understanding and negotiation in a partnership. A managing partner ensures that this is done in the best interest of both companies. Dealing with the contract may be something a managing partner might have to do. This includes setting up, maintaining, and following up on the same. Additionally, lining up both sides’ policies and rules is also a must. To format a standard policy for both partners to follow is also necessary. A managing partner handles this as well. Overseeing permissions, law and other legal aspects too is a duty of the managing partner.
Salary and factors affecting the same
Coming to the salary of a managing partner. It is the one thing that everyone is curious about since a managing partner has so much to shoulder. The average annual salary of a managing partner is 77,000$. However, many factors affect the salary of a managing partner. However, the range is between 60,000$ and goes up to 150,000$. It is imperative to understand the factors that affect the salary before one estimates a salary.
Company
The company you work at is going to affect the salary that you’ll be getting. If your company is a national or international one, there are chances of being able to contribute higher to increase the overall budget and hence, your salary. However, if you’re a startup or local business, the project itself would be smaller leading to a smaller salary.
Partner
Who your partner is will greatly determine the budget and the financial output of the project. Therefore, salary will depend on this too. If your employees are more, the salary will be distributed on a wider level. Moreover, assume your business is a startup working with a national company. Or even consider vice-versa, your salary will vary accordingly. It is needless to say, whoever pitches in more, gets more. Furthermore, your partner’s financial resources will be a deciding factor for the final budget. Their contribution will add to the distribution of salary.
Budget
As mentioned above, the budget is widely accumulated and created on many factors. How much both parties put in is a primary one. Other than this, the funds you receive as well as investing and other sources will also help in deciding. Once the budget is formed, you can get a rough idea of the distribution of salary and the range in which you will be paid. Usually, the financial resources and the size of the project may determine the budget together with the sponsors and financiers.
Income and profit
This is more on the result of the project. How much do you earn from a project? This is more for sales and exhibitions and things like that. Where the income and profit decide how much you’ll be paid. How much the client pays you may be one thing. However, if you’re working on a partnership where you’re directly going out to the public, then the sales will decide your salary. With less profit, it’s natural that the salary won’t be high either and vice-versa.
Incentives & salary
Incentives may also affect a managing partner’s salary. If you’re given more incentives then the salary will be less. If your salary is high, there may not be as many incentives. For instance, a flexible schedule, paid leaves, benefits from the companies, and so on. These may be calculated along with your salary to decide how to pay you back for your services. Often, companies offer heavy incentives along with average pay.
Commission
Generally, managing partners are given a commission based on the performance and outcome of the project. These are between 10,000$ and 50,000$ and may also vary. In such cases, the salary may be adjusted with the commissions. For example, a managing partner may be offered an average salary with a high commission. With things like these, the salary may vary.
Conclusion
A managing partner has many duties to complete. It’s as good as the responsibilities of both partners on their shoulders. Therefore, it is necessary to consider the duties and try to see if the salary matches the same. Salaries of a managing partner will always be higher than most other salaries in the partnership. This is due to the higher roles and onus attached to them.
FAQs
- Who can be hired from a company to be a managing partner?
Generally, both partners collectively divide on a managing partner. This may be from either of the companies themselves or an individual. Technically, partnerships always choose a managing partner from outside the companies to avoid bias and conflict. This person may be a professional managing partner not belonging to any company but offering to lead partnerships.
- Can there be more than one managing partner in a partnership?
Yes, there can. There may be a single managing partner or a duo. There can also be a managing committee. This doesn’t always take place though. More commonly, single or double managing partners are appointed. This happens when companies want a managing partner from within the companies. They tend to appoint one person from each company for coordination and balance while leading the partnership.
- Are there assistant managing partners?
Yes, there are. Assistant managing partners may be required in certain partnerships. This depends on the size of the project, time, and so on. Small to medium projects tend to only have managing partners. Bigger ones require assistants considering the increase in responsibilities. The assistants may either assist in smaller duties like schedules, confirmations, and son. However, they may also be the right-hand of the managing partners and go full-in on the project taking only instructions and tips from the managing partner while they handle the central work.
- Does the salary depend on the performance and quality of work or is it fixed?
Most projects take over a year. Therefore, it is annually fixed. However, the salary may depend on the size of the project. If the project is for a few months, the salary maybe monthly. If the managing partner is a permanent one for the particular partnership, it may be fixed annually. Many factors affect the salary, the profit and income earned may be one of them. Since most salaries are predetermined, performance is not as big a factor but is considered.
