People enter into business partnerships too casually. When a new client contacts me and says: “I have decided to take a partner. Can you draw up the paperwork?”, my first question is “Why do you want to partner”? I continue to be amazed at some of the responses I receive. Like, “she is my friend, and I want to do something nice for her”. (If you want to do something “nice” for her, why don’t you buy her a present?) Or, “I’m not technically trained, but I need the help of an IT person to help build the technology”. (OK, but in the long run, it’s cheaper to pay cash for services, instead of giving away valuable equity.)
Even when the partnership makes sense on paper, because the prospective partner brings money or connections to the table, not enough attention is paid to the personal factors that sustain a partnership over many years through the inevitable ups and downs, factors like communication, trust and respect.
Even when the partnership makes sense on paper, and the intangible factors of communication, trust and respect are present, not enough consideration is given to alternatives such as partnering on a project. Would you marry someone without going on some dates? Business partners do this all the time!
People who decide to partner for all the right reasons sometimes fail to place their partnership on a solid foundation. They skip the step of designing a written agreement with their partners. It’s a truism that a written partnership aligns expectations and avoids misunderstandings, but what is not quite as well known is that the exercise of working on the partnership agreement at the very beginning of the relationship feels good, like two friends going for a jog together. It actually brings the partners closer together.
The Business Divorce Institute has the mission of supporting business owners when they are at the initial stage of considering whether or not to partner, and once the decision to partner is made, in assisting business owners to place their partnership on a solid foundation.