THE “SEVEN Cs”: PARTNERSHIP DANGER SIGNS - The 4th C: CUMULATIVE MONEY PROBLEMS

A series of articles exploring the seven critical areas that can indicate a partnership is in trouble.n nThe 4th C: CUMULATIVE MONEY PROBLEMSn nConflicts over money are very high on the list of reasons that 70% of business partnerships fail. I'm not referring necessarily to lack of money. The damage to business partnerships stem from the fact that each of us have different attitudes about money and therefore handle it in different ways.n nThe most hopeful scenario is that differences have been discussed openly at the outset of the partnership and are continually a topic reviewed with level heads.n nMost often that is not the case. Here is a sample list of the types of problems businesses run into around money where partners can have very opposing views:n n•financial risk takingn•collectionsn•investment of profitsn•family involvement on acquisitionsn•under-capitalization/ involving outside investorsn•perceived inequality in remuneration of each partner based on each one's view of each other's work and responsibilityn•hiring and salaries of employeesn•investments in outside experts to train, coach, market, etc.n nThe money issues in business that accumulate over the course of time are based on many factors, some personal, some internal to the business and some on outside forces beyond anyone's control.n nBill and Vincent were investing in a new business. Vincent was unemployed with limited funds, so at the outset Bill did the financing. There was growing tension between them because of this. Bill felt he had more right to make decisions. He also had a subtle way of belittling Vincent because of it. How could such interaction be a good basis for a new business?n nThey were wise enough to seek coaching, during which I helped Vincent spell out the behavior that was not obvious to Bill. Vincent on his own was too uncomfortable to communicate clearly how he was feeling. When it was out in the open in our coaching sessions they were able to make some changes so Vincent was able to contribute more in ways that made him feel respected. They also set some goals and deadlines for adjustments in the financial contributions.n nOpen communication in this scenario prevented problems from escalating into major conflict which could have ultimately ended the partnership.n nPartnership agreements can go a long way to spell out how money decisions will be made. However, partnership agreements are not very efficient in predicting how personalities will react in various unforeseen situations and crises.n nProtect your partnership as much as possible. Choose your partner wisely. Choose your business wisely. Engage a coach early in the process. Here are some of the ways it will pay a high return on your investment:n n•make sure partners are on the same page and well suitedn•discuss important issues unique to you for the partnership agreementn•improve communication and as a result focus on the smooth functioning of the business instead of on personality issuesn•better and more efficient decision making and problem solvingn•greater commitment to the end result and less time wasted in disagreements and problemsn•more pleasant atmosphere carried over to employees, clients and vendorsn•devoted employeesn•better service resulting in increased bottom linen nDo you have a challenge around your business partnership or any other type of partnership? Give me a call or send an email. I offer a complimentary coaching session so you can find out if it's the right vehicle for you to move to the next level in your business and relationships.n