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Why do business partnerships so often fail?

Why do business partnerships so often fail?

On Behalf of | Jan 13, 2022 | Business Litigation |

A business partnership might sound like a good idea in the beginning. A whole world of possibility awaits, you are probably working side by side with someone you like and trust, and you don’t have to face business challenges alone. What could go wrong? A lot, it turns out. But by better understanding why partnerships fail, you can help yours succeed, or at least place yourself in a stronger position in any potential litigation that arises in the event the partnership sours.

A vague understanding of your partner’s goals

What does your partner want out of the business? To succeed of course, just like you. But there is much more you should know about the objectives of the person you are joining in this endeavor. How does your partner measure success? Are they looking for a quick score, only to sell the successful business to the highest bidder, or are they passionate about your cause and want to make a life’s work out of it? You should have an in-depth understanding of each other’s goals before taking any further step in creating your business.

Ambiguous assignment of duties

Are you more of an idea person, or are you good with people? Perhaps you are a tech expert. What about your partner? Knowing your strengths and weaknesses and assigning responsibilities based on those factors can be a great boon to your business. But, you need to be specific if you want to avoid future disputes. There are some things nobody wants to do (who is taking out the office garbage on Tuesdays?) but they must be done all the same. By assigning these tasks early on and getting in in writing, you can avoid a situation in which one partner feels taken advantage of.

Different stages of life

What you want out of your life plays a big role in what you want out of your business. Some people thrive with the mindset that a business should take every ounce of energy they have, while some are simply looking for a source of income that still allows time for leisure. Either mindset is fine, but if you differ sharply from your business partner on this topic, it may spell trouble for the future.

In the end, it’s just you

While your interests are closely aligned with the interests of your partner, there comes a time when you must look out for yourself. If you find yourself in a partnership dispute and it’s getting serious, make sure to do what you can to strengthen your own position. Whether the partnership continues or not, your future is worth protecting.