3 Reasons why business partners break up and how to prevent them
- July 2021
- 2 minutes
Partnerships are an ideal way to run a business for many entrepreneurs. When you run a business with a partner, you do not have to make all the decisions alone. It means you have someone by your side to help you carry the load and share your thoughts. When it lasts, that can be a fantastic thing.
Many business partnerships, unfortunately, fail. Although business partnerships fail for a variety of reasons, there are a few key factors that contribute to their dissolution. Here are three reasons why business partners split up, as well as steps you can take to avoid it.
Every partnership has times when one person contributes less than the others in terms of time, money, energy, or other resources. That is perfectly normal. When this happens over a long period of time or becomes a pattern, resentment can develop, and the other partners may feel taken advantage of.
In some cases, a disparity in contributions is natural. For example, if one of the partners has a lot more money or time to invest. These situations require a conversation, however, to ensure that the inequality is addressed and made up for in other ways. If one person has more money to contribute, can the other make it up by contributing more time? If one partner is in a stressful period—maybe they need to step back for a few months due to health issues—can they pick up the slack later so the other partner can take some time off?
Unequal contributions can be addressed and managed, but all partners must discuss the situation and develop a reasonable and realistic plan to ensure that the disparity does not become an insurmountable issue.
Not hiring help
When the people involved in a partnership believe they can handle any issue that comes their way, even if it is outside their area of expertise, they get into trouble. It does not matter how many people are in the partnership; none of them should be doing the accounting if none of them are good with numbers.
When people take on too many activities outside their expertise, problems arise. Mistakes get made and people get blamed. Relationships can sour.
Discuss your areas of expertise and activities that you are not comfortable doing with your partners. Any tasks in which no one has expertise should be delegated to a professional so that each of you can concentrate on your strengths and comfort zones.
Business partners should share a common vision for the company so that they can all work toward the same objectives. It’s fine if partners have slightly different ideas about how to achieve those objectives, but the overall vision should be in sync. Problems can take hold when partners have deeply different visions for the company and how to meet their goals.
Creating a shared vision is a crucial first step. Make sure your company has a formal, written strategic plan in place to do so. Write the plan with your partners and review it on a regular basis. Ensure that everyone is committed to the same vision and that any shifts in perspective have been addressed.
If you’re about to start a business partnership, discuss with your partners why they want to run a business, what their vision is for the company and what their long-term goals are. Make sure everyone is at least somewhat aligned. Business partnerships can be incredibly rewarding, but they also have the potential for issues. Open communication about your ability to contribute, your skill sets, and your vision will help your partnership to stay on track and prevent a breakup.