Most people don’t know the statistic before they collaborate with a partner for a business venture: 80 per cent of business partnerships ultimately fail.
Ignorant of this, a lot of people proceed with setting up a partnership and joint venture in complete confidence. The motivation for this unsurprising, given that in a working partnership, benefits include better capital, increased resources, more skills, and more knowledge. However, if the relationship fails, benefits can turn into liabilities.
Recognizing problems and signs at an early stage can reduce the chances of a partnership collapsing. Here are several signs to NOT disregard if you want to continue with successful business relations:
1. Unresolved financial concerns
Money is a core part of any commercial activity and is not limited to earnings or revenue. In a joint venture, both parties are obligated to make monetary decisions related to spending, saving, investing, and of course, distribution.
Occasional disagreements are part of any project; but frequent disputes, especially those around the proper allocation of money, indicate a lack of sustainability in your future.
2. Unbalanced effort
One well-known entrepreneur has stated that if your business partner isn’t working as hard as you, then the partnership is a sinking ship. It might be floating now, but it’s not going to get you to where you want to go.
In a 50/50 partnership, both individuals put in an equal amount of work. If one of the parties is putting significantly extra effort, it will create an unbalanced relationship. If this is also an issue in your collaboration, talk to your partner and try to devise a plan that would make the workload more equal. If this becomes a constant issue, you may have to consider moving forward without the partnership.
3. Differences in direction
If you and your partner have different ideas about the future of your organization, then consider it a warning sign. It’s fine to have varying perceptions on general factors, but if your views regarding the future differ too much, the relationship can be a source of problems and disconnect. Address differences in your business goals by communicating with your partner, listening to their views, and working on a mutual compromise.
4. Lack of trust
Trust is the foundation of any meaningful relationship, including business partnerships. Whether you’re talking about finances or personal matters, your co-investor should be honest with you at all times. If this is not the case, then your future together is at risk — you can’t function as real partners if you don’t trust one another.
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Conflict is a natural part of relationships, but when conflict becomes chronic, it’s time to rethink your long-term association. Dissolving a business partnership is not an easy task, but if things become dire, then moving forward alone may be the right decision.
It’s also important to keep in mind that just because one partnership failed doesn’t mean future ones will. Just like romantic relationships, some matches are better than others. The important thing is not perfection; it’s learning from what has happened and moving forward, ready to take on the next challenge with skill and grace.