For long, the world of start-ups has been hit by the ‘perfect co-founder’ search. The ideal co-founder steps in with a pool of complementary skill sets whilst sharing the start-up costs and risks too! Alas, numbers shout that 70 percent of business partnerships ultimately fail.
Here’s an inside into why most of the business partnerships fail!
The Trust Factor :
The foundation of a successful business partnership lies in the honestly and openness between partners. Prior to signing on the dotted line, do your homework. Find rejoinders to the following questions: what is the reputation of your co-founder in the community? Has he previously faced legal difficulties? Has he been bankrupt or has poor credit rating or been in difficulty with the tax authorities? Is he willing to agree to a written partnership agreement that outlines all the critical aspects of the business?
Scrutinizing prospective partners and arming yourself with a comprehensive written partnership agreement ensures you have higher chances of having a successful, long-term business partnership.
The Higher Chances of Clashes :
Sharing risk, vision and having complementary skill sets are some of the great advantages of business partnerships. However, if the personalities clash then the business is destined for trouble.
Quiz each other with following questions: Are you a risk taker? Are you highly motivated? What is your way of handling difficult situations such? What are your expectations of each other in respect to the business?
The Unequal Commitment :
Get a commitment check done! For a rocking partnership, it’s vital that all partners are willing to make equal contributions. On the flip side, if the partners have an understanding of each other prior commitments than equal contribution issues may not arise.
The Contrasting Value Set:
Another integral part is the alignment of partner’s value’s and goals for the organization. As the business gets bigger this rift can also get bigger. Meet your partners and indulge in some brain storming on why they want to become entrepreneurs? What is their vision for the company? Their long-term objectives?
The Family/Friends Factor:
A large percentage of partnerships between spouse and family are successful. As you already have trust and comfort. However, this cannot be the only ground factor. It should be complementary strengths, talents, personalities, and experience. As a ground rule, always maintain difference between business and personal relationships.