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As a serial entrepreneur, I’ve had my share of good and bad business partners. One experience in particular started out pretty good because this person had lots of industry knowledge and connections. We literally could walk into just about any account and the prospect would buy our services. It was great, at least for a while. Then personality conflicts started and it was no longer fun or productive and it quickly went downhill from there.

So what went wrong? The biggest problem was not knowing him very well. Rather than taking the time to do the due diligence on him, the focus was on the chance to grow a company quickly and profitably based on his knowledge of the industry and my knowledge of the product. We had never worked together before so leadership style or values were an unknown. However, once we started working together, it quickly became clear that his way of doing business was totally different in terms of employees, customers and money. I see this a lot when working with clients now. It looks great on paper but issues arise when put into practice and personalities react to various situations.

Just like a marriage that starts off all hearts, roses and dreams, you need a good mood like a partnership can quickly turn into heartbreak, anger, lawsuits and bankruptcy. Before you even think of pulling the trigger with a business partner, contemplate whether you even need one at all. If you decide it is a good idea, make sure you get the best match to your own values, goals, leadership style and skills. Because once you become partners, it is vastly more difficult to undo the partnership than it is to create it.

 

Following are eight points to consider to avoid a bad partnership.

1. Trust.
This is first on the list for a reason. Bottom line, do you trust this individual with your personal bank account. If the answer is “no,” think twice. As partners, every dollar you spend proportionately affects your personal check book.

2. Friendship.
If the person is a good friend, make sure that their goals, values and responsibilities are aligned to yours. Don’t assume just because you get along as friends that they are. Take a look at their personal life and how stable it is. Personal problems are difficult and can easily complicate their professional life. If there is any doubt, don’t do it.

 





3. Trial run.
Select a person you have experience with at work, at a nonprofit or on a project. You should know if they are a team player and how they react in difficult situations. If you have no experience with a potential partner at all, do a trial run for a specified period of time before finalizing the partnership.

 

4. Partner, employee or consultant.
Don’t partner with someone just because you can’t afford to hire them. It is better to hire them as a consultant than to give away a part of your company or to find out later that he/she is not a good partner for you.

 

5. Varied strengths.
Make sure you and your partner’s strengths are in different areas. If you have two people who are good at sales and no one who is good at executing on an operational level, it will be more challenging than you think. It is much better to bring someone in who will compliment your strengths. In order to grow profitably, keep some balance.

 

6. Balanced responsibilities.
Both parties need to agree up front what their responsibilities are in the company and stick to them. If one person keeps trying to take over and do everything or ends up doing very little, then the partnership will start to unravel and feelings of resentment will fester.

 

7. Money.
Just like in marriage, money is always one of the major problems in a business partnership. Therefore, agree in the beginning how you will use the funding you raise and how the profits will be distributed.

 

8. Valuation/contracts.
Decide on a formula to determine the value of the company should one partner decide to leave to avoid disagreements. Buy/Sell agreements are incredibly useful for discussing all possibilities and how they will be handled before they become a reality.

 

Why is all of this so important? Because a great business can be severely damaged by a bad partnership and never reach its full potential. Starting a business and/or a partnership is an emotional experience. When doing your due diligence, set your emotions aside and make sure everything lines up and has the potential at staying aligned. [1]

Choosing the right business partner allows you to accomplish your goals and fulfill your dreams, even before you know it. Use the above mentioned tactics to select a partner with whom you’ll have true synergy and a successful union.

 

Photo Courtesy Butchers Salon and Facebar London.

Photo Courtesy Butchers Salon and Facebar London.

Reveal; The True Story Finding Business Partner

Why business partners clash
Spending extended periods of time together is necessary and unavoidable when starting a business. And unless your co-founder is superhuman, it’s likely that little things they do will start to rile you.

Being together constantly can be challenging,” says Susannah Jones, who co-founded Butchers salon in Hackney with Katie Knox, a friend and former colleague. “We know everything about each other and I know the way I breathe heavily when stressed can irritate Katie. I won’t reveal what annoys me about her.

The likelihood of conflict increases after the first six months, when the adrenaline rush is over and the day-to-day reality of working together hits, says Christina Lattimer, leadership coach, consultant and founder of the People Development Network. In extreme cases, this can cause daily power struggles if co-founders have opposing personalities.

Tushar Agarwal, co-founder of Hubble, an online marketplace for London office space, met his business partner Tom Watson through Entrepreneur First, a pre-seed investment programme. Agarwal sought someone with complementary skills, but their different personalities mean they disagree daily over design and copywriting.

I want everything to be perfect and nuanced before it’s seen by the world, however long it takes. Whereas Tom believes in solving the problem with a quick and dirty solution as soon as possible.

Conflict can also arise over money when both partners have access to bank accounts, says Mandy Fitzmaurice, managing director of Purple HR. “I’ve heard stories about one clearing out the account and doing a runner or racking up debt without telling the other.

What’s wrong with a little discord?
While not all clashes are detrimental, if they persist they can have a disastrous impact on a business’s success, says Lattimer. “Whatever the energy inside the partnership, it will inevitably seep out to customers and employees.

Conflict can also damage personal productivity. “It’s impossible to operate effectively if you’re at loggerheads with each other,” says Fitzmaurice. “If left unresolved, disagreements can lead to terrible disputes, dishonesty and lawyers.

 

Photo Courtesy Butchers Salon and Facebar London - We Are Pop Up.

Photo Courtesy Butchers Salon and Facebar London – We Are Pop Up.

How to reduce the risk of conflict
It’s important not to take criticism personally, and to settle disagreements through feedback from an external source. “Put it to the jury,” says Pip Black, co-founder of Frame fitness studios. “We have passionate staff and customers so if we need help making a call on something or want a sounding board, we ask them.

Agarwal and his co-founder settle most disagreements with data. When they clashed over how important the “about” page was on their website, they collected data over two weeks to see how many people visited it.

Compromise can work if your disagreements aren’t settled easily with numbers. Missy Flynn and her two co-founders are equally opinionated but they have avoided arguments about their business, Rita’s bar and restaurant in Hackney. “Rita’s was always meant to be a sum of its parts and everything – the decor, the food, the drink, the music and our ethos has a bit of all of us in it.

Black and her business partner Joan Murphy couldn’t agree on a name for their fitness studio – she wanted to call it Shake Studios while Murphy preferred Gym and Tonic, so they went back to the drawing board and Frame was a happy compromise.

To ensure your relationship doesn’t revolve around your business, make an effort to socialise together outside of work. Jones and Knox of Butchers salon schedule regular “date nights” when they’re feeling stressed.

It sounds grown up but our last one ended with us climbing off a boat pissed at 7am,” says Knox. “Date nights remind us that we’re friends, not just business partners.

For the team at Rita’s, it’s important to get out of the restaurant from time to time. “Sometimes you forget what you used to do when you were just friends without a business. Take a walk, drink a beer, or a coffee, cook dinner and watch movies. Anything.

If you do find yourself in a blazing row with your co-founder, take a breather and move on as quickly as possible. “The longer the problem continues, the bigger the issue grows,” says Lattimer.

Photo Courtesy Amuse - Vice.

Photo Courtesy Amuse – Vice.

When Lucy Greene and Pandora Lennard, co-founders of modelling agency Anti-Agency, argue, “the eruption will end with the right answer and we just forget the argument ever happened and move on,” says Greene.

Lennard adds: “We both have very fiery tempers so arguments tend to burn out as fast as they flare up. We’re like siblings – we bicker but always make up with hugs.

And while it’s easy to fixate on disagreements, congratulate yourselves when you work well together, advises Lattimer, and remind yourselves why you wanted to do it in the first place.

 

Trial phase
Agarwal recommends that entrepreneurs have a trial phase of working together to discover key points of disagreement and personality clashes before committing to anything. “Work on a few small, intense projects to test what it would be like when you’re both stressed in a high-pressure environment.

And pick your co-founders wisely. Make sure they’re reliable and dedicated, says Eamon Jubbawy, co-founder of background-checking company Onfido: “Are they the type of person who would get out of bed at 3am to help you fix a bug or prepare a client deck? In the early days of a company, those moments define success or failure.

Once you’ve established a partnership, set clear boundaries. Having more distinct roles from the beginning would have saved Frame’s co-founders a lot of time, says Black; and Flynn would introduce a “no work texts after 10pm” rule with her Rita’s co-founders.

It’s a full-on relationship, adds Flynn, and it won’t be perfect. You might not like each other every day but remember to look after each other – you’re friends after all. [2]

 

This Article Curated by Benang Merah Komunikasi’s Editorial team.

We consider to take journalism ethics and contents reposting etiquette seriously, that you can find here about media ethics. We do curation article for our audiences, not for search engine bots. By addressing this growing area of concern we hope reader can be smart to filter and understand between content plagiarism and content curation method.

References Sources:

[1] Taken from 8 Critical Considerations for Choosing the Right Business Partner written by Pamela Wasley for Entrepreneur.

[2] Taken from Could you run a startup with your best friend? written by Natalie Gil for The Guardian.

Franciscus Zheng

Author Franciscus Zheng

Founder, CEO, and act a lead Creative Director of Benang Merah Komunikasi itself. A Producer and also an artist. A friend and a creative entrepreneur, when in his very young age has spurred enthusiasm to grow become an originator of fresh ideas. Board of director of this company was a melancholic person.

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