As we all know, partnerships are a pretty common strategy in the world of business. As you first start out, it seems like a no-brainer. Whether it’s with your friend, colleague or even life partner – you already know each other inside-out and it seems like a win-win situation.
Of course, as it turns out, this is a really complex situation to get into. It’s not uncommon for relationships to be completely ruined following a business partnership, and this is what we hope you’ll avoid after you’ve read today’s article. We will now take a look at some of the most common business partnership mistakes and go from there.
Mistake #1 – You forget the paperwork
We’ve used the term “forget”, but for most people it doesn’t come down to the F-word. Instead, they don’t usually put together any formal paperwork for their partnership because they trust the individual too much.
Of course, we’re all for trust, but there’s a time and a place. When you start out with your partnership, the relationship between the two of you is all rosy (at least, it should be if you have taken the plunge). Unfortunately, there’s never a guarantee that this is going to last indefinitely, and this is why it’s absolutely crucial to get the relevant paperwork in order so it’s legally clear who has what responsibilities.
Mistake #2 – You don’t have a shared vision
You are never going to share the same ideas on every topic that your business covers, but on the most part you need to have a shared vision. For example, when it comes to financing, if one of you wants to take advantage of a business loan but the other person wants to get other investors involved, this creates an obvious stand-off.
Then, there’s the direction of the business itself. You both need to understand exactly what you want to achieve, and how you want to do it. Again, if one half of the partnership wants to focus on one product, but the other wants to do something entirely different, it creates that imbalance we have spoken about.
Mistake #3 – You don’t use your individual strengths
When you operate as a sole trader, you know your own strengths and limitations. Then, when partnerships come into the picture, there is an element of the unknown.
Try and make it your priority to understand what your partner can bring to the table, and perhaps what they are lacking. Do this, and the chances of conflict arising because of these imbalances will shrink considerably.
Mistake #4 – You rush in
Finally, starting a partnership is an exciting time. At the same time, it’s a precarious one – and a lot hangs in the balance. It’s not just a new business, and ultimately your livelihood, but it’s relationships as well. This is something that makes partnerships so difficult but if you do get them right, the end result is utterly rewarding. Take your time, and make sure that you are making the right move between the two of you.