Maybe it’s the continual rain these last few weeks, but my boys don’t seem to be able to get along for any length of time. It’s not too surprising. Even though they generally enjoy a good partnership, they have different personalities, temperaments, and often different goals for the activities they take on. As kids, they don’t always navigate these differences (and the conflict that inevitably arises) very well.
As an adult, you assume you can use your judgement, reason and experience to bridge any gaps you may have with a business partner, but this isn’t always the case. Partnerships typically start out well – you like each other, have similar interests, and readily see how you can combine your talents and resources to grow your business, serve a broader group of clients, or divide the labor. Sometimes partnerships are born out of a need for camaraderie. And it’s all great, as long as you don’t ignore the differences that can drive you apart later.
Some sources of potential conflict:
- One partner needs to draw more money from the business than the other to support their family or lifestyle. This forces the other partner into an uncomfortable decision – do I accept a lower level of compensation than my partner? Or do I take out the same amount, understanding that we now must sustain a higher level of revenue to pay two higher salaries? If this is an issue for you and your potential partner, discuss it upfront and make sure you understand the financial reality for each of you (and for the business as a whole) before you enter into any partnership.
- One partner brings more to the table than the other. Perhaps they have a higher level of investment, a larger group of clients, or a better industry reputation. This sets up an inequity than can lead to bad feelings later. One of the most obvious ways to avoid this is not to share ownership 50/50. Acknowledge upfront what each partner brings to the relationship and reflect this in the ownership percentages. Sure that means one person has more say than the other, but believe me, when the inevitable disagreements arise, someone will need to have the final say or you cannot move the business forward.
- The partners have significantly different personalities or work styles. Sometimes personality differences can be a tremendous asset; other times, they cause conflict that you cannot breach. If you are a Type A, work-all-night kind of professional and your partner leaves at 4:30 and turns the cell phone off over the weekend there is no doubt this will breed resentment – and fast. Make sure you are compatible. Take a personality test if necessary to find out. There’s nothing quite as uncomfortable as going to work each day with someone you no longer like.
- The partners have different definitions of success or long-term goals. It’s really awkward to sit in a strategic planning session where one partner has a 5-year plan to sell the business – and the other partner is not only completely clueless, they’re in it for the long haul. Make sure you completely understand your partner’s long-term vision. You don’t necessarily have to share the same goals, but your planning and your structure should be able to accommodate them if they differ.
And please, have a formal partnership agreement in place from the day you open your combined business! It’s easy in those early days (when you still like each other) to ignore your differences, but a partnership that doesn’t work out not only leads to feelings of disappointment, anger and betrayal, it can also financially devastate both parties. Approach this with the same caution with which you’d approach any major life decision and line out how you’ll handle any problems that arise.
My boys did not choose their partnership; it was thrust upon them by the accident of birth. Fortunately, they can usually resolve their differences and move on. If not, I’m there to intervene – and I clearly have the final say.
Any tips for terrific partnerships? Post your comments or send them to email@example.com – if I use them, I’ll feature your business.