3 Signs You May Need To Split From Your Business Partner
In our last blog, we listed a number of ways that people can make successes out of their new business partnerships. They include having a successful history together, signing a written partnership agreement and being able to have tough talks about money.
While “two heads are better than one”, there’s no question that forming a new business partnership isn’t easy. In fact, for many business partners, the union is one that causes more stress than it does success. Does this sound familiar?
Here are three signs you may need to split from your business partner:
1. Your business partner insists on a 50/50 partnership.
This one may come as a surprise to you. In some unique cases, not everyone should be equal. Many business experts champion the idea of having someone in charge. It may sound like a recipe for disaster to have one partner own a smaller stake in the company than the other. However, as Brad Sugars stresses on Entrepreneur.com, every business, including partnerships, needs a boss.
“If you decide to go the partnership route, make it a 60/40 or 70/30 split,” he advises, “Then you and the business have a point person for accountability and overall operational control. Also, keep your buyout or exit strategy clear and in your favour–benefitting you and saving problems down the road.”
2. The two of you don’t agree on the company’s vision.
If you and your business partner aren’t on the same page about where your company should be heading, then trouble is brewing. Sharing a joint vision for the business is vital. Without agreeing on a destination for the brand, the road will be more than rocky. On Inc.com, Bill Murphy Jr. warns that disagreements about a company’s future are bound to derail the venture.
“It’s crucial that co-founders agree on the vision–both their short-term understanding of the company’s value proposition, and their long-term understanding of how they think the venture fits into the world,” he writes.
3. Your friendship is suffering.
This is arguably the absolute hardest aspect of being in a business relationship. You can’t be best friends. Many a friendship has been destroyed because of a business-related fall out. If you and your business partner are best buds, you may wish to consider splitting the business to save the friendship. According to Sugars, you shouldn’t go into any partnership with a friend expecting to remain friends after a partnership breakup.
“It may sound great to do business with your friends, but remember, in the business world, it’s always business first and friendships second,” he warns, “Also remember, most times when the business ends, so does the friendship.”
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