When you first went into partnership for you it seemed like a great way to start a business.
The experience, knowledge and financial input from two people can give you a head start and a sense of security.
While there are many long term business partnerships that are successful, there are even more that either fail, or hold back the growth of your business.
The most important aspect of any partnership is that your business goals align.
In this post we look at questions you can ask yourself about the health of your partnership to determine whether it's time to go your own way to achieve the goals that you desire.
You both have different goals
This point is huge. We see it a lot and it can hold businesses back from achieving growth and profit.
The cause of most conflicts in business partnerships are different goals. It's common for one partner to be gung-ho in working hard to grow the business and achieve higher profits, while the other partner is just happy to keep plodding along as they are.
Understand all the goals, small and large, that you and your partner wish to strive for. If both partners are on different pages then you’ll be pulling the business in different directions. If you cannot decide on which goals to achieve or how to achieve them or they’re very different to your own, then it's time to plan your exit strategy.
You want to invest in training & growth
Even with combined knowledge, experience and skills in a partnerships, you also need to understand the limitations of you and your partner. You may want to address your business limitations through training to improve your trade skills or growing your business, such as business coaching Having your own business training and access to business experts is what separates average businesses from highly profitable businesses.
When you see the need to invest in outside expertise and your partner isn't willing to invest in growing the business, then it's time to re-evaluate your partnership.
You don’t communicate when problems arise
Problems are bound to arise with any business and proper communication is crucial to the ongoing success of any partnership. Take the time to regularly check in face-to-face to address
any issues as they arise, before small problems inflate to bigger ones. Both partners need to be open-minded on opinions and suggestions in regards to the business and if your partner is dismissing what you are saying then it is time to evaluate this partnership.
You are supplying the capital for the business
Securing the business assets against your personal assets such as your home or money can be risky, while we like to see the best in people you need to remember that this is a business and you need to be making business decisions.
It's important for expenses to be shared in the partnership so that you don't carry all of the risk, and to make it easy to walk away should the need arise.
You feel like you are doing most of the work
If you are putting the most effort into the business and your partner isn't keeping up, this can be a clear warning sign that needs addressing. This often doesn't refer to the manual labour you put in, but instead the work involved to manage and grow the business.
You lack clearly-defined roles
While a partnership should be 50/50, you and your partner may have very different skill sets to contribute to the business. A good partnership will have defined roles for each partner depending on their strengths and weaknesses. When job roles are defined, that person should be the decision maker in that particular area of the business. When partners cannot clearly define their roles or back each other up in front of others, disagreements and tensions arises and disputes can flare up.
You also need to consider the situation if something happens to your business partner - you might end up in business with their significant other! At best you end up with someone with no skills to contribute to the business, however they could end up making decisions that really harm the business.
If you are in a 50/50 partnership and noticing these issues, then it's time to either re-negotiate the partnership or execute your exit strategy.
No Signed Partnership Agreement
It's extremely important to have a legally binding partnership agreement drafted by an agreed-upon lawyer. The agreement must detail all aspects of the partnership including the obligations of each party.
Is it time to exit the partnership?
If you have some (or worst case ALL of the above issues) then it's time to seriously consider what benefit the partnership has for the business. Just like a failed marriage, it's important to end the partnership sooner and back yourself so that you can get on with growing your own business.
Sticking with a partnership that is hindering your business growth will actually cost you more money in the long run.
In most cases the only way to see if your partnership can be saved is to involve a third party that can determine if the goals of both individuals can work for the business. The best person to help you with this is a business coach that can look at everything objectively and also help you with an exit strategy so that you can get on with building and growing the business your way.
At Tradie Accelerator our training programs combine both coaching and mentoring to get the best results, so feel free to contact us from our contact page or if your prefer to talk to one of our consultants call 1300 658 403.