For many, having a business partner is the smartest path to success. You can pull your skill sets together, share startup costs, and help mitigate risks. In fact, more entrepreneurs find success with a partner than without.
While the pros of having a business partner can lead to incredible highs, the cons can lead to crushed dreams and legal headaches. While more entrepreneurs find success with a partner, roughly 70% end up splitting from their duo. What causes these close-knit relationships to ultimately fail, though?
Heading into a business partnership requires a deep level of trust, which is why many start out as relationships. Some entrepreneurs begin their business venture with a friend, spouse, or family member. While it might seem like an excellent idea, this path can ultimately end in disaster, suggests family law attorney Debra Schoenberg.
Partnerships rely on complementary strengths, experience, and talents. While these types of relationships offer those matches, issues arise when partners begin mixing business with the relationship. Partners must be able to discuss their dealings in a frank, open manner. That kind of conversation can lead couples to split, friendships to dissolve, and cause bad blood between family.
Creating a startup requires intense personal and financial commitment. When working with a partner, both parties must make an equal contribution to the business in order for it to succeed. Several partnerships fall apart when one party makes the necessary sacrifices while the other does not.
That isn’t to say that partnerships don’t require give and take, however. One individual may be investing more of themselves into the business while the other takes care of personal matters, family, or other obligation. The issue arises when one partner never offers to shoulder their fair share.
This deal breaker comes in a variety of forms. Some partners fail to discuss the organization’s values before diving head-first into starting the business, while others simply see their values change over time. For instance, one party might believe in green manufacturing while the other does not.
Partners may have differing views on the company’s corporate compliance rules, how the business interacts with the public through social media, or creative concepts for the brand. Discussing your values as well as the business’ before starting anything is highly recommended.
A Failed Venture
It takes patience, determination, and the ability to persevere to run a business. When the venture is failing or taking too long to see success, many partners find themselves wanting out before the ship sinks completely.
A lack of revenue, especially with all of the financial strain it takes to start a business, can take a psychological toll on anyone. Conflicts arise and partners may find themselves second guessing their decision to do business together.
While all partners disagree at times, those with incredibly different personalities tend to fight like cats and dogs. These confrontations often arise from varying opinions about how the business should operate or the specific action of one partner.
Motivation, the willingness to take risks, and dealing with difficult situations are all a part of your personality. When two people handle those scenarios in different ways, conflicts tend to arise. It isn’t impossible for partners to reconcile these differences, but it does cause all too many to split ways.