We’ve all heard stories about friends or family members who go into business together only to end up bitter enemies (with failed companies) because one of them has slacked off, made terrible decisions, stolen money, or manipulated the other.
At the same time, countless business partnerships thrive and succeed. What differentiates the nightmare pairings from the dynamic duos? And when it comes to starting your business, should you go into partnership or are you better off going it alone?
There’s no easy answer to this question. You have to do some soul searching before you make your decision. Being aware of the risks upfront is essential. If you do decide to partner with someone, however, the following tips may prevent the conflicts and misunderstandings that lead to failure.
- Don’t overestimate the strength of your personal relationship or underestimate the potential for a business-related conflict to harm or destroy it. I have known women (and men) who’ve lost what they thought were indestructible friendships over partnership and financial disagreements.
- Agree on your initial goals and business plan. Before you make your final decision to partner, sit down and work out a basic business plan. This can be accomplished in a few hours and will be necessary whether you ultimately partner or not. After going through this process, you’ll have a much better idea of whether your goals and vision match, and how you each perceive your work plan and respective roles going forward. In addition, you’ll see how you function together in planning mode. A form to help you create your plan is available on my website.
- Put it in writing. Just as it takes great communication to make a strong marriage, it’s also key to a good business relationship. The more you communicate your vision and expectations for this company, the clearer you’ll both be about what the future holds. Don’t avoid raising difficult issues. If one partner is better situated financially, for instance, raise this issue. “Little” issues you now avoid can become “big” issues under the pressures of a new business. That’s why your methods of communication should include a written agreement. You’ll both enter this partnership with the best of intentions and the hope that it will be long lasting, fulfilling and lucrative. But good intentions are not enough when your company’s journey to success encounters its inevitable twists and turns.
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