Failure is probably the last thing on your mind when creating a business partnership. Yet, the majority of business partnerships do not last. When they go wrong, it can lead to bitter fallouts that can damage both parties.
Successful businesses partnerships require work
Forming a partnership is only the first step. Like any relationship, you will both have to continue putting in the effort if you want it to succeed. Here are some common reasons that small business partnerships end in problems:
- Different visions: You want to be the best restaurant in the neighborhood. Your partner wants to be the biggest chain in the world.
- Different financial realities: You need to take money out of the company each month to support your family. Your partner wants to reinvest funds to open new premises.
- Different commitments: You are willing to put everything into making this a success. Your partner has another 20 businesses which require their time.
- Lack of definition: You thought as the chef, you had full creative control of the menu. Your partner believes as someone who likes to eat in restaurants, his opinion counts more. When your roles lack definition, disputes will happen more often.
- Lack of communication: You are too busy cooking to answer the phone. Your partner expects you to schedule appointments to discuss anything through his secretary.
- Lack of an exit plan: You want to quit and find someone to buy your percentage at an excellent price. Your partner demands the first refusal at a much lower price.
If you want to create a business partnership to last, seek help to set it up in the correct legal manner. Not every relationship goes smoothly. Ensure you include clauses that will help you amicably settle any disputes between you.