Selecting the right business partner is essential for the success of any shared business venture. However, even with the best of intentions and due diligence, things can go wrong, and you might realize that you’ve made a mistake in choosing your business partner.
This can be a critical error that means the business will fail. It could also mean you’re more likely to find yourself engaged in partnership disputes. That’s why it’s so important to identify red flags in advance.
What red flags should you look for?
You want your business to run smoothly. To help, here are some signs that might indicate that you have the wrong business partner:
- Lack of shared vision and values: If your partner’s vision and values don’t align with yours, it can create conflicts and hinder the growth of the business. You may even feel like you’re working against each other, rather than working together as partners.
- Poor communication: Communication is key in any partnership. If your partner doesn’t communicate effectively, misunderstandings can occur, leading to problems down the line. Lack of communication also makes disputes far more likely since you both may make incorrect assumptions.
- Different work ethics: If your partner is not as committed or hardworking as you are, it can create resentment and lead to a lack of trust. You need to work with someone who values the business the way that you do and who puts in the same time and effort.
- Financial issues and disagreements: Money, pay and financing are often top sources of conflict in business partnerships. If your partner has different financial goals or is not transparent about finances, it can be a red flag. One important thing for partners to talk about when starting a business is just how much they are expected to invest and how much they will be paid. It’s best to have all financial decisions in writing.
- Lack of complementary skills: A successful partnership requires complementary skills. If your partner doesn’t bring the necessary skills to the table, it can hinder the growth of the business. For example, your business is stronger with one person who is good at product development and one who is good at sales, rather than two salespeople who don’t have a good product – or two excellent designers who can’t sell the products they’ve made.
When starting your business partnership or trying to navigate a dispute, be sure you know what legal steps you need to take. Addressing these issues up front often makes things go smoothly and can lead to better protection of your interests and your company as you move forward.