Thinking of finding a business partner? Maybe you and a good friend have an idea for a new business? Or maybe you had a business partner in the past, but the company went south.

Today, I’ll be sharing my take on partnerships. You’ll have a chance to hear not only my personal experience, but the stark statistics on these dynamic duos and trios.

I have started 7 businesses producing $25 million in revenue. Six of them have been partnerships. And of those six, all of them ended in ways that were not what I expected.

There was pain, loss, confusion, unmet expectations, frustrations, hurt, and even legal issues. It makes me think of Dave Ramsey’s quote on the topic:

“The only ship that won’t sail is a partnership.”

Statistically speaking, partnerships don’t work in the long run. Forbes says that over 80% of partnerships fail within 3 years. That’s even worse than our country’s divorce rate!

It’s time to stop fooling ourselves that partnerships make running a business easier. That’s a lie. Partnerships can once in a while make a business stronger. But never easier. A partnership is work. And to be honest, if you get into a partnership, you’ll likely spend 25-40% of your time managing the partnership instead of building the business.

Successful partnerships require a level of maturity, patience, and time most entrepreneur-minded folks don’t have.

The 5 Common Excuses People Use To Justify Partnerships

Self ignorance

You think you are partner material. You think you work well with others. But you don’t. Deep inside, you’re a lone wolf leader. Or more commonly known as an A-type. And A-types need to be allowed to be a-types. Because if they don’t, two things will happen: First, they hurt people with their intense spirit. Second, their speed and intuition will be hindered ultimately slowing the overall success of the business.

2. Professional Impatience

We often take on partners to speed up the launch process. We think, “They can help. They can split the cost. They can make the right introductions. We can get twice as much done.” That’s great in the beginning. But I bet more often than not, if you just slowed down, saved more money, worked harder, and flexed your patience muscle you could do everything all on your own. Instead, hire some help. Ask for favors. Bring in an intern. All worthy solutions for speeding up without giving up the pie.

3. Flawed Generosity

I often hear business owners talking about employee stock option pools or giving stock to high performers or bringing in a qualified leader for “X” percent. Stop it. Don’t let the world make you feel guilty about it either. Remember, this is coming from the guy who wrote a book called People Over Profit. You don’t give up stock. This is your business. Giving up stock only happens in an emergency. If you want to offer incentives give people bonuses, commissions, profit share agreements, more vacation days, take them to dinner, buy them a company car. But don’t give up stock.

4. Lack of Business or Finance Knowledge

People think, “I don’t know enough to start a business so I’ll have to partner with someone who does.” While this might be partially true, the solution is wrong. This is the entire reason I launched StartupCamp. College is no longer a viable solution. Reading random books is tough. Finding a business mentor is even harder. But the good news is entrepreneurship is a learnable skill. For example, our 12 month curriculum will walk any aspiring entrepreneur step-by-step to launch your own business within 5 months. Then, we will spend 7 months making it fail proof. Don’t get a partner and give up a portion of your company when you can learn everything you need to know for $99 per month.

5. Low Self Confidence (Most Common)

I can’t do this by myself. I need help. I’m not smart enough. Skilled enough. Brave enough. I’m here to tell you that all this is a learned mentality. Starting your own business (key word “own”) will be a great exercise in self confidence. By taking on the journey solo, you’ll quickly realize you’re far more capable than you give yourself credit for. Trust me, I’ve seen everyone from moms and college students to part time electricians and full time teachers start their own business. Low confidence is a hurdle but not a stopper. And definitely not a valid excuse to bring in a partner.

So the lesson is this: There are many ways to motivate, engage, and work with people without partnering. You could form a joint venture agreement, A revenue share agreement, A profit pool, a commission program, a performance bonus or any other imaginative working model.

What are your thoughts on partnerships? Have you been able to hold a partnership for longer than 5 years? Let us know about it in the comments below.

By startup camp

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Partnerships are for suckers?

Finding a business partner may seem hard, but finding your rhythm with your business partner is much harder. Although I’ve worked with the same business partner for over ten years now, it took us a few years to find our rhythm. Sure, things are great between us, and both of us are extremely happy, but it wasn’t easy for us to get to where we are today.I watched many other business partners try to work it out together, but in most cases they fail. It’s not because of hard work, money or their smarts… it’s because they are afraid of the following: Reason #1: Confrontation People are afraid to confront one and another. I don’t know why, but this is the number one reason my business partner and I do so well with each other. If we feel that either of us is screwing up, we call each other on it. We don’t care if we hurt each other’s feelings. We say what is on our minds. Why? Because we both want to succeed and do what is best for the business. So if one of us is holding back the business or doing something wrong, we make sure we point it out. If you are too afraid to tell your business partner how you feel, you won’t be able to make your partnership work. Reason #2: Communication Without communication, nothing is going to get done. Not only should you and your partner communicate on a regular basis, but you should over-communicate. Talk with each other on a regular basis, find problems within the company and try to solve them together. What I’ve learned is that excessive communication also helps keep both of you motivated. You will come up with ideas, get excited about what you are doing and have fun working together. Reason #3: Roles You and your partner shouldn’t be doing the same thing within the company, especially when you are starting out. You won’t have enough cash to hire other people, so you need to focus on solving different problems. In other words, you need to divide and conquer. Typically, my business partner deals with product and engineering, and I deal with all things related to revenue. Where we overlap is in the area of marketing and strategy. Make sure you clearly define who is going to work on what so you aren’t stepping on each other’s toes. Reason #4: Time You can’t expect to create a perfect partnership within a few weeks, months or even a year. It will take you at least a few years to figure out how each of you works and to evolve into your roles. You will also realize that things change over time. When I first started working with my business partner, I was the technical one, and he was the business guy. Today, we both understand business really well, but he focuses more on the technical side, while I focus on the business side. In other words, we’ve kind of switched roles. Time will also heal a lot of problems you are facing. When money is rolling in, things usually aren’t too bad. But when it stops coming in, problems arise. With time, you’ll learn how to work things out and create a happy partnership. Reason #5: Life goals Although personal life goals shouldn’t affect a partnership, they actually do. If your goal is to live a relaxed lifestyle on the beach while your partner wants to work seven days a week in the office, things aren’t going to work out. One of you will feel that the other isn’t pulling his or her weight, and it will eventually create a lot of problems. If your goals in life are aligned with your partner’s, it will help keep the peace. The reason my partner and I do so well together is because we both love working seven days a week, and all we want to do is build a big business. Neither of us has any other hobbies in life, other than our business. Before you partner up with anyone, make sure you have similar life goals… especially when it comes to work. Reason #6: Friendship You may disagree with me on this one, but your business partner shouldn’t be your best friend. You need time apart, and you need to have your own group of friends. If you are with your partner every single day, eventually you will get sick of hanging around him/her. You want to have your own circle of friends because it will give you more space. Plus, it will help you improve the business because your business partner will learn different things from his/her friends versus what you learn from yours. You can then combine the knowledge you’ve both gained and work on growing your business. Reason #7: Execution I’ve found that some partners love to talk to each other and strategize on a daily basis. But they lack in one thing: execution. If neither of you can execute, things won’t work out long-term. Focus your time and energy on getting stuff done because you need to feel like there is a sense of accomplishment. If you don’t, you will start pointing fingers at each other. Reason #8: Emotions Emotions tend to get the best of all of us. When someone calls you out or places blame on you, it is natural for you to argue and fight back. You can’t get emotional with your business partner; you need to be logical. When something is wrong, take a step back and look at it from an outsider’s perspective. Figure out what the logical response would be and take that approach. At the end of the day you both will do what you feel is best for the company, so there is no need to get emotional. Emotions won’t help you accomplish your goals; they will just cloud your judgment. Conclusion I hope one day you’ll be able to find as great of a business partner as I’ve found. Sure, things won’t be perfect when you are starting out, but if you give it a few years and work through the things I mentioned above, you will be able to create a happy partnership. So, for what other reasons do most business partnerships fail?

Source: By Neil Patel

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