Why Most Business Partnerships Don’t Work Out?
Updated: Jul 16, 2020
Finding a business partner for your new startup or your existing business is a challenge in itself and getting in rhythm with them is another one. Another challenge comes when that partnership fails.
The best way to deal with a bad business partner is to not go into business with them in the first place. Going into business with someone should not be a decision made lightly. Just because you are friends or you have worked with a person in the past does not mean they will make a good partner in business.
If you’re unsure of how well your business partnership is working out, here are some things to watch out for...
Undisclosed Financial Burdens
Honesty is the first and foremost expectation out of a potential business partner. If the partnership begins with a lie, it would be hardly surprising if it didn't last. A long, poor credit history, previous bankruptcies, or being banned from running a business are big red flags. Also, being aware of other projects partners have their hands in currently both successful and unsuccessful ones will give you an idea of the type of business partners they will be.
Partners are not Solution-Oriented
If the partners focus on problems rather than finding solutions, no partnership will ever work out. Everyone needs to rant to let out steam from time to time but, if that's all one is doing may be the business partner is operating from the wrong frame of mind. You should be keeping this thing in mind while searching for a business partner.
Different Value Systems
There are two major areas you should agree on: finances and the type of work you do. If you find yourself fighting over things like expenses and bonuses, or if one person wants to accept a lot of pro-bono work while the other is totally focused on money, that can spell doom for your partnership. A shared vision is important, as is agreeing on how to achieve that vision.
One Partner Refuses to Sign a Financial Agreement
Partnership agreements are crucial to define the vision of the company and the roles of individual partners in achieving it. If a partner refuses to sign the deed, they may either have something to hide or are unwilling to commit to the business. Neither is a good sign and the idea of working together should be nipped in the bud.
Business partners need not and in fact, should not have the same skill set. Having mutually exclusive skills that are also complementary is good for business. However, if the years or quality of experience of business partners differ by a wide margin, then the partnership is unlikely to strike a chord.
One Partner does all the Work
Being busy isn’t the same as being productive and if you’re experiencing trouble in this area, it’s time to have a talk. If your partner can’t seem to increase their productivity, try these tips on keeping your business partner motivated. Despite everything, if you are doing all the work, it might be time to say goodbye.
Lack of Communication Skills
More often than not, it is this simple lack of a life skill that causes a business partnership to dwindle. Partners do not communicate their concerns which slowly turn into internalized grudges finishing off into an ugly showdown. This lack of poor communication skills could also affect the relationship with clients, vendors, or the community and hurt your company reputation.
You should be really careful and selective while you are looking out for a new business partner for your entrepreneurship venture. You should always look for certain qualities in your business partner before hiring anyone. Some wise person says - Better safer than sorry!