Take time to choose carefully and avoid the pitfalls.
In theory, a partner, who could be a friend or colleague, is a great way to start in business. But in my experience, it’s not always the best way in the longer-term as partners tend to drift apart, particularly when spouses are involved.
Taking on a partner in business is just like a marriage, and if you know anything about those statistics, you know half of all marriages don’t survive. Making a marriage work involves handling a volatile mix of issues like egos, money, stress and contributions each partner makes.
Having a partner can be a satisfying, profitable and enduring form of business relationship, but the problems generally arise when money either runs out or starts to flow. Few are successful after the initial excitement is replaced by hard work and can result in a breakdown of old relationships, and loss of personal assets if debts are incurred.
“It is rare to find a business partner who is selfless. If you are lucky it happens once in a lifetime”. Michael Eisner
Often the compromises each partner makes in getting the partnership to work could kill the business idea or opportunity’s potential. This is in contrast to engaging partnerships with external people, contractors and organisations.
If you’re thinking about taking on a partner, consider the following and avoid the potential downsides:
- Partnering with someone because you don’t understand external partnerships.
- Partnering with someone because you can’t afford to hire.
- Having a 50/50 partnership when someone needs to be the boss.
- There is a contribution imbalance.
- Sharing capital instead of expenses.
- Influences of non-participating spouses.
- No exit strategy to protect the business if someone wants
- Expecting the friendships to outlast a breakup of the partnership.
- Overlooking a limited partnership arrangement.
- Lacking a written and signed partnership agreement.
- All partnerships have expiry dates.
Usually, the best type of partnership is ann external organisation who will work with and help your business to mutual advantage. These are the types of partnerships that you want and there may be a number of them. As an organisation, they can, or should add to your credibility as well as give you access to resources and expertise you need.
[read more=”Personal Experience” less=”Personal Experience”]
During my life, I have had many types of partners and partnerships and the one thing that always sticks in my mind is.
When a partner says they will give me 100%, did they mean they would give me 100% now, or did they mean that will give me 50% now and the other 50% when the project looked like being successful? Let me tell you the latter is more prevalent.