A business partnership is very appealing to anyone who is planning to create their own company. There are many advantages: shared cost and responsibility, access to a broader range of expertise, and moral support. Despite these benefits, few business partnerships succeed, even those between best friends and families.
Nowadays, the internet, low cost, lots of opportunities, and convenient e-commerce platforms have made it easier for anyone to launch their own business. However, there will always be risks or the possibility of failure. A business partnership can mitigate both, but first, you need to make sure your relationship survives these five struggles.
Conflicting Goals and Values
Goals and values are on top of the list of things that business partners should have in common; otherwise, there will be numerous disagreements between the partners. Goals will dictate a person’s motivations, and values will determine how people work for their objectives.
For instance, if one partner’s goal is to work toward growing the business on a large scale while the other is satisfied with staying small, this will create rifts between the two. One person may be taking more responsibilities while the other isn’t pulling their weight.
Not all your goals and values have to align. Diversity is also vital for lasting partnerships, but you should share the same vision, mission, and core values for your company.
Differing Levels of Commitment
Commitment is another thing that partners should have equal measures. Starting a business may be easier now with technological innovations and better accessibility to opportunities, but success is not guaranteed. Hence, it takes a lot of commitment to start something from scratch and continue working despite the challenges faced by business start-ups.
The level of commitment also determines a person’s dedication and willingness to sacrifice their time, energy, and money to achieve their goals. From the very start, partners should talk about their commitment to seeing the business through to avoid specific conflicts in the future.
Money can be the root of many conflicts between many partnerships, personal or professional. When partnering up with someone, both of you should be clear about how much money each one will give in the business and how to divide equity later.
Partners who don’t divide financial responsibilities equally will almost always have disagreements about money later. One side may feel entitled to receive a bigger share of the profit after investing more money while the other may think they’ve seen the difference through labor. Whatever the case, it’s best to discuss financial matters at length and hire an experienced attorney to draft a partnership agreement.
Contrasting Management Styles
This may not be an issue until the business starts growing and hiring more people. However, different management styles can cause severe clashes between business partners. One party may adopt the autocratic style, making decisions with little to no input from subordinates, while the other prefers a laissez-faire method, giving the employee reins over the majority of decisions.
The differences in styles may balance each other in the beginning, but the equilibrium may not last long. The autocratic boss may find the other too casual and indecisive while the laissez-faire leader may get stifled and intimidated by all the rules and assertiveness of the other.
Each management style will always have its pros and cons, so partners shouldn’t be so set on one method. Management styles should be determined and discussed by the partners to establish a balance. Setting rules and regulations early on can also help both partners stay objective when their management styles clash.
Lack of Trust between Partners
Trust is the foundation of a partnership. Without mutual trust, two individuals planning to start a business won’t be able to cooperate with each other. Entering into business has a lot of risks, and partners should trust each other to weather the storms without breaking up the partnership.
Having confidence in your partner and vice versa can also lessen disagreements or tensions between you two. If you and your partner don’t see eye to eye on some issues, you can talk it out calmly and reach a consensus without causing a crack on your partnership.
A partnership may be the best thing to happen to your business goal, or it could be the worst. Many business partnerships have not stood the test of time, mainly due to conflicts and differences. But don’t let the difficulties stop you.
History has proven that business partnerships can last a lifetime and generations later. Look at Ben Cohen and Jerry Greenfield, Baskin-Robbins, Hewlett-Packard, and other successful business partnerships.