Do your business partnerships feel like a bad episode of “The Dating Game”?
Instead of your dream date, Mr. Cash Cow, on the other side of the divider, you’ve got distractions, numbers in disarray, and profit killers.
girl business to do?
The Numbers Whisperer® to the rescue!
Three common reasons business partnerships fail, and how to avoid them.
This post is part of the February Word Carnival. The topic for the group this month – All You Need is Love. February is the month of l’amour, and the carnies do not let you down.
Look for a Business Partner not a Business Clone
Alternate Title: Dating Yourself is Weird and Wrong
Having a business partner should make things easier, right?
Imagine this for a minute. You’ve found the perfect partner, they’re just like you! They have the same likes, dislikes, skills and opinions. What could be better? A new partnership is born.
Shortly after you launch you realize both of you hate to sell. Maybe numbers are your joint nemesis. Or you discover that neither of you are any good with the nitty gritty details.
Suddenly your weaknesses are amplified, exacerbated by two people who can’t (or won’t) address them. Instead of being able to draw strength from your partner, it’s like trying to prop up a building with popsicle sticks.
Before jumping into a partnership, discuss who will handle all the crucial aspects of the business. Then write it down.
Who has the sales expertise? Marketing & branding? Finance? Product development? Taxes? Legal? If neither of you are able to handle a certain function do you have the funds to outsource?
Sealed with a Handshake is Heading to He&$ in a Handbasket
Alternate Title: But he looked so nice and normal. What could go wrong?
This one is simple. Have a partnership contract.
Then why do so many people enter into a partnership or joint venture without a signed contract?
Here’s just a few that I’ve heard;
- Asking for a contract looks like I don’t trust them. Why would I go into business with someone I don’t trust?
- But we agree on everything, why do we need a contract?
- I can’t read or create legal documents, so why have one?
Let me count the ways these situations are doomed to failure. Nevermind, we don’t have time to do all that counting! By putting an agreement in writing you can ensure that your potential partner is really hearing what you saying. And vice versa.
Many honest miscommunications occur in business. Often when a discussion is documented in writing discrepancies arise. Otherwise why would there need to be meeting note revisions and approval?
The simple act of putting things in writing often brings partnership mismatches to light. From my perspective I know I’m operating with full disclosure and honesty. So why wouldn’t I be willing to put my commitments in writing?
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Partner with a Fighter NOT a (Day) Dreamer
Alternate Title: Don’t fall in love with love. Ideas are fun, but success takes hard work.
When was the last time someone walked up to you (unprompted) and said, “Hey I’d like to buy the idea you just thought up.” When have you ever heard of someone posting an idea online and getting gobs of money thrown at them?
As Carol Roth says in her book, The Entrepreneur Equation
A penny for your thoughts… if you’re lucky.
Without clear, well thought out action, ideas have no value.
Has your potential partner demonstrated that they can act? Have they successfully launched and sold at least one product or service? If you see evidence of “failure to ship” it’s a sure sign you’ve got a dreamer on your hands.
Are they already talking about the second, third or even fourth product you could offer when the first is no more than a sketch on a napkin? Do they resist discussions about the nuts and bolts of implementation, waving it away as mere details?
With a dreamer as a partner you’ll be doing all the work, but only getting half the profit. On what planet is that a good deal?
Partnership with the right person can be an amazing, profitable experience. A bad fit in romance or in partnership will drag you down, miring you and your profits in the muck. Choose wisely.
Have you had a partnership fail? What are warning signs you see looking back?
Nicole Fende is The Numbers Whisperer® and author of How to be a Finance Rock Star: The Small Business Owner’s Ticket to Multi-Platinum Profits. You can listen to her live on Wednesdays at 11 a.m. CST on Finance Rock Star Radio. Thursdays at 2:30 p.m. CST she co-hosts the live TV Show Call a Biz Hero with Laura Petrolino.