Working with a business partner can be a great way to build a strong company, but risks are involved. No matter how much you feel like you’re in alignment with them, you can’t know everything they’re thinking.
Several situations can unfold within a business partnership. Unfortunately, you can’t predict when or if you’ll experience a severe disagreement or when things will go wrong. If you’ve gone into business with a friend, you’re more at risk for potential issues.
If you’re working within a partnership, be prepared to handle the following five potential situations.
- Disagreement on the Main Vision
Nothing will derail a business like the founders disagreeing on the main vision. Disagreement usually arises because of miscommunication. Sometimes, people initially feel as though they share the same concepts, but it takes time to realize they differ in critical areas.
If you and your business partner disagree on the vision for the company, and you’re a key player, consider buying out your partner. There’s a process involved in buying out a business partner, so make sure you do everything by the book and consult with an attorney.
For example, you’ll need to review your paperwork to make sure you follow your agreement. You’ll also need to value your business and find a way to obtain the funds to buy out your partner. This is all contingent on their agreement to be bought out.
- Your Partner Hires an Unqualified Friend or Family Member
Sometimes people take advantage of their authority and hire friends or relatives who need a job. That’s usually not a problem if the person can do the job, but often, they are unqualified. When that’s the case, a situation could arise where the employee collects a paycheck for doing subpar work. They may even call in sick frequently, show up late, or refuse to be held accountable.
If you find that your business partner has hired a friend or relative, find out if they’re qualified for the job. Don’t be afraid to have a discussion. You’ve invested your time and money to build your business, and you have every right to make sure employees are qualified.
- You Need to Relocate
Sometimes you can’t predict when your life circumstances will change direction, and you’ll need to move. If you’ve built a local business with your partner, it may come as a shock when they find out about your moving plans.
If you need to move, you’ll have to have a serious talk with your partner about how you plan on running the business. For example, you might need to step down in terms of your duties and hire someone to take your place. Or, moving might open up an opportunity to expand your business into an eCommerce endeavor.
- Your Rent Goes Up
If you have a physical location, it’s always a shock when your landlord raises the rent. Most commercial leases are long enough that rent raises are almost forgettable – until they happen.
Although an increase in bills is inevitable, it’s still an extra expense. If you’re a well-established business, it’s not usually worth moving your location to save money alone, as you’ll lose customers. The best thing to do is figure out ways to generate additional sales to make up for the extra expense.
- You Lose a Reliable Product Source
Losing a reliable source for your product or product parts can set your business back. More than likely, you’ll need time to find a new supplier, and in the meantime, you may need to halt production and limit sales according to your inventory levels.
Unfortunately, all you can do is start looking for another source when this happens. If you and your partner set high standards for the company, you’ll be starting over to make sure all possible suppliers meet your specific needs.
Success Requires Having a Transparent Partnership
To make a business partnership work, you need to have a certain level of honesty, transparency, and trust. These qualities serve as the foundation for a successful partnership.
Sometimes business partnerships work out, but not always. Have an exit strategy if your business partner doesn’t align with you or your business. While you may be able to buy out your partner, you should always be prepared for different situations to unfold. Don’t be afraid to part ways when it’s the only sensible option.
This content is a joint venture between our publication and our partner. We do not endorse any product or service in the article.