If you want to increase your chances of successfully building a startup into a money making machine, my advice is to surround yourself with awesome people – never go at it alone. Learn to delegate, seek counsel, and if you can, find an ambitious business partner…
With that said, business partnerships break apart all the time. Whether it’s Fortune 500 companies, or garage-based startups, the failure rate for business partnerships is climbing. Why is that?
Well, I’ve seen many business partnerships fail over the years and I’m going to share the top five reasons why they don’t make it.
1. Hit Hard Times: Plain and simple, some people just can’t take the heat. The problem is, it’s hard to know who can or can’t take the pressure of building a business during those lean months (sometimes years) when you are trying to get the business off the ground, without actually going through that tough period with them.
Being an entrepreneur is volatile, especially in the beginning. It’s damn hard, and stressful. So If you’re thinking about partnering with someone who is used to receiving a pay cheque, get ready to become a counselor/coach. You’re going to have rid that partner’s employee mentality from their psyche.
My advice: don’t partner with anyone who has had a steady pay cheque for more than a couple years. Don’t partner with someone who has a family if you don’t have one yourself. And don’t partner with someone who is accustom to the finer things in life. Form a partnership with a grinder. Form a partnership with someone who has something to prove, is smart and hungry. Form a business partnership with someone who doesn’t mind eating pizza for dinner on a Saturday night after putting in a 12 hour work day…
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2. Too Many Cooks in the Kitchen: If partners have identical skill sets, the business is doomed. Time will be wasted, resources depleted, and conflict will likely be constant.
Every restaurant only has one executive chef. And that executive chef isn’t the same person producing the marketing content, training the serving staff and selecting the decor. The same concept goes for any other business. Form a partnership with someone who is excellent at vital skills you aren’t so good at. Check your ego at the door.
3. The Visionary and the Vagabond: Don’t form a partnership with someone who has ADD… just kidding, I have ADD.
Seriously though, this is an important one. Both partners can be completely committed to success, willing to grind out the tough times together, have complimentary skill sets, and still end up failing. Here’s why: One partner is steadfast, staying on course and focused on achieving goals systematically, one at a time; while the other comes up with one great idea after another, yet never follows through long enough to see any idea come to fruition.
You can’t form a successful business partnership with someone who wants to walk before they crawl. Ideas are great, but execution and discipline is what matters in building a successful business. The good thing is, people who jump from one idea to the next are often easy to identify. Just hang out with them for a few days and you’ll see what I mean.
4. The Dictator: Some people just like to nag. They like to tell people what to do. This doesn’t work in a business partnership, or any partnership for that matter. Don’t even think about partnering with someone who is a know it all, or likes to argue, or has a Napolean complex. Dictators often end up in nasty business partnership disputes…not good.
5. Different Values: Your brand, no matter what industry you operate in, will reflect your personal values. So if you partner with someone who doesn’t share your same personal values, the business is doomed from the get-go. Don’t overlook this one.
There you have it. These are the top five reasons why business partnerships fail.
I didn’t write this article to try and scare you away from forming a business partnership with someone – quite the opposite in fact. I want to make sure you are aware of what to look out for, and most importantly, what to avoid when trying to find a business partner.
I’m an advocate of business partnerships. Many hands make light work. And don’t listen to that bullshit about not going into business with family or friends. That’s crap. It’s important you trust who you go into business with. And who can you trust more than family and friends? Just make sure they aren’t a vagabond, dictator or have an employee mentality.