Partnerships can significantly benefit two or more businesses. If you are an entrepreneur considering (or currently in) one, you can offer your expertise in exchange for someone else’s in a field you are unfamiliar with, and you can tap into their existing customer base without having to do much additional marketing. However, businesses are run by people, which means they are still subject to squabbles and missteps. To foster the most advantageous and healthy business relationship possible, be proactive about avoiding these following mistakes that can derail your partnership.
Not doing your homework
Many business relationships develop between establishments that are not in direct competition with one another but occupy logically related industries that compliment one another. However, just because you or your partner may look like you will fit together on paper, does not mean that you will do so in practice.
Research whichever businesses you are hoping to team up with, and be transparent with them in return. Because companies are only as good as the people that run them, consider asking for a personality test with the representatives you will work alongside most as if you were going to employ them. Analyze their online presences, check references, and request a business credit check. Diving into an alliance without fully understanding who your partner is could result in lost money, lawsuits, and personal frustration.
Assuming too much
Never enter a partnership assuming you know everything. You probably have a lot to teach each other, but how can you learn when you think you already possess all the answers? Even if you are an expert in your industry, there are probably other areas your partner is more familiar with than you are. Do not assume that your partner is all-knowing about what they do, either—they should know as much as possible, but if there are legal rules that you should be following and do not have a department overseeing that, assuming that your partner knows those rules and is following them can lead to trouble without verification.
A successful partnership means both (or all) parties need to be committed to it. You should share a common vision for what you want to accomplish, an idea of what steps you plan to take to get there, a notion how you expect them to go, and a willingness to be open and cooperative with one another. If you are in this half-heartedly, why should your partner trust you? Likewise, if the other business seems unenthusiastic about teaming up, then it is unlikely that the two of you will be able to overcome inevitable obstacles.
A strong alliance necessitates dedication. It’s understandable if either of you desires to chase new opportunities, but your relationship can fracture if your focus or interests grow apart. If you foresee this happening, compose a thorough plan for it. Should your partnership dissolve, you want to escape from it gracefully instead of losing your reputation.
Going in over your head
It’s encouraged to lean on your partner for expertise they might have that you lack, but be sure you are not pursuing a project that you do not fully understand. Take ICOs, for instance: while they are becoming increasingly popular, they entail much more than crowdfunding and generating digital tokens to distribute.
You should possess a thorough comprehension of what blockchain technology is, how it would integrate into your business model, what marketing efforts are necessary, what legal regulations you must comply with, and more. Be sure to check out ICO reports regularly and educate yourself as much as possible. If you are in over your head, you are obviously not ready for such a project (and your partner might take advantage of you).
Thinking you deserve more
It can be tempting to think that you are working harder than your partner, and you, therefore, deserve more money out of the deal. Similarly, you might find yourself believing that you are entitled to more compensation if someone else is challenging to work with. These lines of thought are dangerous, though. Both of you have different realities, so you need to work together to adapt and acknowledge both strengths and vulnerabilities.
President of Macaby Group, Barry Sarner, advises hosting weekly meetings that encourage empathetic and respectful communication. It is also possible that as your partnership progresses, your duties will change. In this case, welcome it, and acknowledge that “The responsibilities and strengths that you bring to the new venture are not necessarily the responsibilities and strengths that will be in play when things get started and rolling along.”
If you want to engage in a successful business relationship, all parties need to be transparent, committed, and adaptable. What are other mistakes you know of that can damage a partnership?