3 Signs That a Partnership Is Never Going to Work

“I am no longer willing to tolerate my business partner taking money from the business without talking to me first. She puts personal items on the company credit card too. Now, with covid-19, we need every cent to cover expenses and she’s spending it on herself. Can you help me?”

What Is the Real Problem?

It might seem like this partner is tied to a dishonest and unreliable partner. When I asked about the things the other partner charged on the company’s card and the approximate costs of the partner’s personal spending for a year, the answer surprised me. “He buys mostly food things like snacks. Last year? It was almost $200.”  Is it worth getting that wound up over chips? Maybe. After all, feelings are relative to the person. What isn’t a big deal to me, might be a serious infraction of the rules to you. I understand.

I also have to pay close attention to what each partner expresses when I conduct my private interviews before we start a mediation process. I must determine the seriousness of the situation. Sometimes, it’s better to accept that a partnership will never work out.

There  Are 3 Signs That a Partnership Is Probably NOT Going to Work

#1 Trust

When the trust is gone, it’s hard to get back. Avoid drawing comparisons to marriage. A business partnership is very different both emotionally and legally. When trust breaks in business, it is nearly impossible to repair. A partnership cannot function properly without absolute trust.

I have been able to help partners rebuild trust when all partners are willing to adopt new processes of transparency. But, for this to work, there must be 100% compliance by all. Otherwise too much time and energy is wasted in constantly checking up on each other. For example, we might set a weekly ‘allowance’ for little discretionary expenses like lunches and snacks. The amount must never be exceeded and all partners need to be agreeable to the allowance. If I suggest a small amount for a weekly spend on little things like lunches and snacks and that is met with strong opposition, it tells me the problem is a lot deeper than a few candy bars.

#2 Respect

Respect is a difficult term to define. There are a lot of pieces that make up respect. Appreciation is one. If the partners do not appreciate each other’s contributions to the business, it will manifest in shoddy treatment. It often sounds like, “I manage the business and make all the decisions and she just handles one thing: sales.” Sales is a pretty important item to keep a business running, right? Or, “I work at least 60 hours a week and he’s home at 5:00 every day and never works on weekends.”

Load imbalance, even if it’s just a perceived imbalance, erodes respect. Also, when a partner feels that her contribution is more important, respect is damaged.

When respect isn’t there, it reflects in mistreatment. When I ask about the issues in the partnership, I’ll hear about things that seem small. Petty is the word. The snack thing is a big example. If, when filling the gas tank, a partner buys a bottle of water and a bag of chips, it shouldn’t be cause to launch a major investigation. That sort of spending would not be acceptable if an employee was doing it. I would expect employees to buy their own snacks unless policy permitted it. A partner is an owner and deserves better treatment and spending latitude. As owners, we get paid last and often LESS. Be decent with each other. Be respectful.

#3 Affection

It’s important that business partners have at least some affection for each other. I’m not talking about a deep love between partners, but there has to be care. When I hear “we get along well enough to get the work done, but when I go home I leave it all at the office. I have no desire to hang out on weekends,” it’s a red flag. Sure, you spend enough time together at work and need to get away from it for your own mental health. But when people express that they want nothing to do with their partner other than work, it’s concerning.

Good business partners care about each other. They care about each other’s families. They see their partners as being important to the success of the business. Successful business partners LIKE each other. Unlike employees, who are replaceable, partners should not be seen that way. The bond with your business partner is stronger.   

How to Interpret the 3 Signs

I’ve ranked these items in order of importance. If the trust is gone, that’s very serious and it might not be possible to rebuild it. If the respect isn’t there like it should be, it’s possible to repair. Affection for your partner, or friendship outside of your working relationship may be impossible but that may not be the end if we can rebuild trust and respect. We need to take the severity of each into account.

The most important thing is to be honest with yourself. If you don’t trust your business partner, should you remain in business together? Are you part of the problem? Having a third party evaluate the severity of your partnership problems can save a lot of time and money. Before there is a blow up, get the advice you need to preserve your own sanity.

There Is a Time to Dissolve the Partnership

A good mediator will not only help repair a partnership, but also tell you when it’s time to separate. There is no shame in dissolving a partnership. If the trust is broken and if partners lack respect, it may be time to break it up. Separation can be mediated to a successful conclusion. Sometimes that’s your better option.

“Talk with me before you decide to get out of your business partnership. In many cases, talking about the problems and getting new processes in place can put even the most tense partnership back on track.”

Chris Reich (Chris@TeachU.com)