6 Most Common Business Partnership Issues
Here Are the 6 Most Common Issues That Hurt Business Partnerships
Even though I am presenting you with only 6, there are others. For example, substance abuse by one partner can destroy a business. I have seen it. But these 6 items represent the issues that I see most often. Here’s something that might surprise you. Finding out that the problem is one of these 6 should bring a sense of relief. These are relatively easy to deal with. I have successfully worked through all of these with my clients.
You may wonder why I would bother to write this. When we see that others have experienced the same problem, it gives us some comfort. I want you to know that your problem isn’t all that unique and that it can be fixed. Let’s get started.
This is the hardest one on the list to repair. When 2 people just cannot get along, it takes a bit of work to get through the junk and out to a better place. Personality clashes require patience by all parties as we talk through the differences. Clients often compliment me as being their ‘business shrink’. When there is a clash of personality, it is important to realize that all parties make mistakes. Things can be said in anger that fester for years. I’ve had conversations with partners that contain statements like, “you said things about me back when we were starting out that really hurt,” or “when you used to recheck my work 5 years ago, that really bothered me.”
We fix the personality clash by talking through the problems until everybody feels heard. Unlike therapy, I don’t try to fix personality defects. That’s not my job.
Instead, I propose processes and agreements that take personality out of the daily operation. I refer to this as ‘bringing definition’ to the situation. Once we get a clear definition of roles and define processes for settling differences, the business will function well. The tension goes away and often the relationships heal over time.
This is sad. Starting a business should be a fun and rewarding experience. But it’s also a ton of hard work and stress. Partners burn out when they work too long for too little. They won’t burn out at the same time because people are different and the workloads are sometimes uneven. (I’ll address uneven workloads next) When someone burns out, they usually stop working. The other partner sees it as ‘flaking out’ rather than burning out. Tensions rise. When I get the call, it sounds like this, “he just doesn’t do anything. I do all the work and I’m sick of it!”
We fix burnout by working on agreements for time off. Both partners need to take days and even weeks off. We have to rebuild trust and we must create easy agreements at first. For example, we might give one partner every other Monday off and the other partner every other Friday. That gives each a long weekend every couple weeks. That helps. The idea is to schedule time away from the business for all partners.
By the way, a partner who never takes time off is trouble. That’s not only unhealthy, it very well may reflect an underlying issue.
Though the solution sounds easy and obvious, it is usually more complicated. We have to talk through the burnout and reach agreements that last. It’s never, ever enough for the burned out partner to take a week’s vacation. Burnout is serious. and a general change of schedule is usually in order.
When one partner feels they are doing a lot more work or spending a lot more time working than other partners, partnership problems ensue. This can be hard to fix without outside help. The partner who assumes the most work often feels used by the other partner. The partner working ‘less’ will often tell me the other partner ‘chooses’ to work more or does things that don’t matter anyway.
I see this with analytical types. They make charts, spreadsheets, and reports giving precise data about the business. The other partner will say that those details aren’t necessary to operate the business. “I spend my weekends making spreadsheets” vs. “you make spreadsheets because you want to. We don’t actually need them”.
Another way that uneven workloads manifest is when a partner is overly controlling. I hear comments like, “but he won’t let me do anything”.
Regardless of the cause of the uneven workload, it often comes down to money. If a partner does more work, they generally want more money.
This can be fixed by talking through the issues first. There is often a lot of misunderstanding wrapped around the problem of uneven workloads. The key is to balance the workloads, distribute pay according to production, or reach agreement that workloads will always be uneven. Often, just talking about the issues will soothe feelings and get the relationship back on track. If we find good combinations of work-pay, agreements can be drafted which provide a basis of understanding. Translated: people will often agree to an uneven workload if there are understandings that go with it.
Like uneven workloads, when a partner takes more money from the business than another partner, trouble begins if there is no agreement on compensation. Agreement on uneven compensation? Yes, very often one partner agrees that the other does more work and deserves more money.
If we reach that place, we can formulate job descriptions and pay that goes with those positions. I call that “paying the position”. If a partner bears all the stress for managing the business while the other partner serves mainly as a sounding board for ideas, we might agree that the CEO makes an amount more than the other positions. This achieves a few things. The tension is talked through and the pay becomes about a position rather than a person. In other words, Joe doesn’t make more than Sam; the CEO makes more than the marketing manager.
We can work out uneven workload and uneven pay by bringing definition to the business. Once roles are defined, pay can be set to positions. This has to be talked through but these conversations are easier than one might think. Agreements work!
Difference in Perception of How Well the Business Is Doing
That may not sound like the basis for much partnership tension but it is. If a partner thinks the business is doing great and the other disagrees, problems spring up over things like business expansion, partner pay, employee pay, and distribution of funds toward debt. What I see most is a partner who wants and deserves more pay and the other partner is convinced the business cannot afford it. The disagreement isn’t over who gets more, it’s about whether the business can afford more.
This can be resolved with deeper sharing of the financial details. When the partners examine the business together in a guided conversation, they often reach agreement on the condition of the business. I believe we must allow for personality differences. One partner may be a lot more conservative. Understanding those differences diffuses the partnership stress and can build new appreciation for what each partner brings to the table.
Difference in Vision for the Business
Up to this point I’ve discussed issues that seem a lot bigger than this one. And, I have given fairly simple paths to resolving each. This one seems almost trivial but can be the most serious. It can also be impossible to fix.
When partners disagree on their visions for the company, things can get serious quickly. One wants to expand to other markets and the other is happy cruising along with the status quo. It can be pretty hard to reconcile these differences but it is possible. I’ve had the most success by helping partners set up divisions within the business. A partner might lead a market expansion and take full responsibility for that new position. Or, we might create a subsidiary business.
Sometimes, if the differences in vision cannot be reconciled, it is best to divide the business in a way that creates two viable entities that start by sharing resources. Or, if things have soured, we might start buyout talks.
You have to be very careful when partners have a difference of vision. That never seems as bad as it is until something snaps. When the tension hits that point, someone invariably wants out. Period. At the first sign of a difference in vision for the future of the business, it is critical that the partners talk and reach agreement about the direction of the company.
These are the 6 most common partnership problems that cause people to call me. They aren’t the only causes of partnership tension, just the most common. Remember too that these seldom occur alone. Often, 2 or more are working against you at the same time.
You are not a bad person if you have tension with your partner. It’s natural. What you do about partnership tension determines the fate of your business. I recommend getting outside ‘moderation’ to help work out the problems. No, not mediation. Moderation. That’s my unique approach. I guide your discussions while you make decisions. Mediators decide. I moderate. We conduct civil conversations with suggestions for resolution. Partners decide how they want to resolve their problems. Agreements are unique to each partnership and often very creative.
As I tell all my clients, “the goal is resolution of differences. You can agree to anything that fixes your problem by agreement and is legal. Pay can be uneven. Hours worked can be uneven. Whatever keeps the doors open so long as no laws are broken, you can do it. If we can get back to why you went into business together in the first place, most problems between partners can be fixed.”
Chris Reich, TeachU
Email: [email protected]
Phone: (530) 467-5690