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Business Partnerships - a perpetual problem?


There is a perpetual problem with partnerships.

One that small businesses need to tussle with. Going it alone can be lonely and frankly not all are suited to it; doing it with another means that you need to compromise on direction, and even if this is not an issue, cope with differential motivation, work ethic, and priorities.

Added to which, invariably, at different times in the business and personal lifecycle, one member of a partnership will feel that they are doing the majority of the work or all the work. This can build up resentment but also can cause the business to suffer – if your efforts were going to be enough on their own you probably would not have set up the partnership in the first place.

Regardless of the due diligence at the outset, or how well it works to start with there frequently comes a time when interests diverge. When this happens within a company the individual simply resigns and is replaced. Or if they cease to put in the effort they are ‘managed out’. Not quite so easy with a partnership. Thus when setting one up I would recommend that very careful thinking is done up front when you are both (or all if more than two) working well together about what happens under each scenario. What do you do about ensuring the effort put in is equal? What do you do if one does or wants to do less than the others? One solution is to separate the payment from the profit side – so you get rewarded differentially for differential effort. Think through the possible worst case scenarios and document how you will deal with these. Doing this when you are working well together means that if the scenario should ever arise you have a blueprint for resolution.

Most of all keep up the dialogue. Small businesses and partnerships probably do not spend enough time talking about working relationships, plans and aspirations, individual motivations. Schedule some of this in. It might feel a bit odd, especially a the beginning but it will benefit and strengthen the partnership.



Published by: Lisette on 26/06/2009 - Add a comment

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