Partnerships are typically formed due to a joint business idea or the need for financial aid with business start-up expense. Either way, only about 40 percent of partnerships work out and partnership dissolution is like a divorce--it’s really ugly.
You can only think and speak for yourself, you cannot for someone else. You can’t assume what someone else is thinking, so you can never speak for your partner. Therefore, there will be differences in your decision-making as a partnership.
If everything is going great with the business, there’s not a problem. But when things get difficult and there is a problem, everyone has their own interpretation of how to solve it and you are always going to have some type of a problem somewhere down the road in a functional business.
A silent partner, who is truly silent, will sometimes work out. But when people invest their money, they usually want to see where it’s going and where it’s coming in. They will eventually want some involvement, which can cause conflict between partners.
May partners develop their business without having a solid business plan, without having a partnership agreement, and without having an understanding upfront about how they’re going to deal with the business. Eventually, it starts falling apart and there’s nothing in writing. It’s hard to even write a partnership contract that will fully protect you and your business should the partnership fail.
A strong marital or family relationship makes for a better partnership because there is an existing bond deeper than any contract. They have a previously developed patience with each other and a nurturing relationship already established. In addition, most family business owners have invested “family” monies and share the work load equally. But even so, many family businesses close due to irresolvable conflict.
New businesses are often referred to as “your baby,” so try to imagine your new business as your first born child. You have dreams and hopes for them to have a happy and prosperous future. You want their lives to be smooth and headed down easy street. You also have a plan to give your child the best odds for this type of life. What if someone else, i.e. your partner, has a very different idea of how to raise “your baby?” Maybe you agree on the infancy of your business, but what about the later years of development, the “teen years?” Will your ideas on how to run the business be the same then?
There are many reasons business partnerships fail; too many to mention here. Statistically, the odds for sole proprietor business success are minimal; with a partner, even less. Try to avoid going into business with a partner. Being a boss is not easy. Being a boss and an owner isn’t easy either. But being an owner and having another owner tell you what to do is even more difficult. Don’t take partners unless you’re married to them, and that may not even be a good idea.
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Carol Denbow is a business start-up expert and the author of three books including “Are You Ready to Be Your Own Boss?” Carol has been a guest speaker on numerous radio and television broadcasts and is a regular contributor to several business websites and publications. Visit Carol’s website at www.BooksByDenbow.Weebly.com