How to Avoid Partnership Disaster

Partnerships can be a great way to start a business - you have someone else who is on your side to dream with, someone who will work side-by-side and, when the going gets tough, someone to get a beer with. 

However, many partnerships break up, and it's brutal. Follow these steps to avoid such a fate:

1. Make sure that 1+1=3. No, I'm not really bad at math, but there have to be exponential gains from a partnership that you could not get from hiring an employee in order for it to work.  It's not worth partnering unless you can identify exponential gains.

2. Clearly define roles and expectations. I know you are excited and feel sure that your partnership will work, but take the time to build out expectations with each other. What do you bring to the table in terms of money, time and connections? What will you do on a day-to-day basis to make the business work?

3. Meet at least once per month to check in on the business and the health of your partnership. All partnerships drift over time as each individual grows and changes. The only way to secure a healthy future for your partnership and your business is to meet regularly to review the health of both. Schedule a regular meeting with a standard agenda, and meet in a professional manner, even if you got together for drinks the night before. This formality is crucial to success.

Here is a simple agenda for your Partnership Meeting:

 

Virginia Ginsburg is founder and chief consultant at Swell Strategies. She is passionate about supporting small business owners and entrepreneurs in starting and running successful enterprises. An avid reader, in this blog she reviews books and articles and relates specific learning points back to entrepreneurial businesses.