What You Should Know About Business Partnerships

Partnerships may seem like a good idea when you start a business. Most of the time they work well. As in love as well as in business, you need to find a partner who is compatible because there are constant challenges and when communications between partners is strained it will make any situation worse.

The idea of a partnership sounds great in theory. You and a family member, friend, or trusted business associate decide to strike it out on your own, either with a side-business or as a full-time venture.

Everything seems rosy in the beginning because you are excited at the prospect of building your business. Trouble can creep into the partnership because decisions need to be made quickly and thoughtfully.

When you have a partner, you need to discuss decisions that will impact the future direction of your company. If you and your partner don’t have a clear understanding of your individual roles, miscommunications will occur causing each of you to waste time versus having a discussion about solving the problem.

A fair number of my clients are in partnerships. This is a combination of married couples, siblings, and individuals who decided to combine their talents to start a business. Most of the time, the business succeeds because each partner gravitates toward their strengths.

Times, when partnerships are most rocky, is when the communication breaks down. We get caught up in our own lives that bad feelings could have been eliminated with a conversation when they first started to appear. These issues can usually be resolved but when they cannot, this is when the partners need to make a decision about getting outside help to resolve the tensions or dissolve the relationship deciding who will be the one to stay and grow the business, and who will leave the business.

When a partnership is in trouble it becomes a significant strain on the individuals involved that it taxes every area of their lives. You need to have fun working in and on your business, no matter what it is, or it just isn’t worth it. My suggestion to clients is to find a consultant, advisor or therapist to help navigate the communication problems between the partners, and have the partners fully committed to improving their relationship for the sake of the business. If these two conditions aren’t met, then it is obvious to have one partner stay and the other leave, or simply close the business.

If you are thinking about starting a business with a partner, my advice to you includes:

  • Ask yourself if you really need a partner — Why do you need a partner? Could the person you want to join you be the second in command or someone who holds a specific senior-level role?
  • Focus on one business at a time – Narrow your vision for your business and go with it! Don’t try to open multiple businesses simultaneously because time is a precious commodity. It is better to make one business the “donut machine” rather than having ten businesses with uncooked dough and ingredients.
  • Partnership workloads are rarely equal! – If both partners are not equally committed to the business, then the partnership dissolves because one partner will think that the other partner isn’t working as diligently. This is especially true when one partner still retains outside employment, while the other partner is in the business full-time.

Do you have advice on how to build a successful business partnership? Please share your thought in the comment section below.

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