Partnerships Usually FailDo you want to know why business partnerships usually fail?  Let me say from the start that I am against partnerships.  I wanted to begin with saying they “always” fail, but I know there are a few out there that have succeeded.    Over the years, I have seen too many ruined companies and relationships.  I have concluded that partnerships are just not a good idea.  Many good business people disagree with me.  That’s OK.  I still respect them.  If you can make a partnership work, great!  You are the exception.

Here are just a few reasons partnerships usually fail and why I am against forming them:

Long decision-making processes.  First, the “buck has to stop” somewhere.  There are always tough decisions that need to be made in a business.  Right?  Business is just like life.  Things happen that affect people, profits and productivity.  When things happen that are less than desirable the leadership has to choose a new direction or make a change.  When those difficult decisions are made by two or more people, I guarantee the decision-making process itself will be extended.  It will be slow.  It will be painful.  There will be disagreement.  Stuff needs to be worked out.  In the meantime, during that slow process other opportunities will be lost.  The market will move on without you.  I’ve seen this before.  I have witnessed situations where the indecision went on for years and the company activity dwindled because of it.

Things change over time.  This is the second big reason partnerships usually fail.  I have seen this numerous times.  A typical scenario:  an older person, knowing that they will someday retire, works out a partnership deal with a younger ambitious employee.  The plan calls for the younger person to gradually buy the older person out.  A decade or so later, the younger person is now married, has children and is growing in a completely new direction with different interests.  They begin to drop hints to the older owner who is now ready to retire.  Now the older has a dilemma.  An existing partnership is in place, the younger wants out.  I have seen this play out where the younger likes the work and has no intention of leaving, but now lacks the desire to invest additional money for the eventual buyout.  Maybe he put his money in a boat and cottage, or maybe other more lucrative investments.  That situation, after several creative and generous offers by the older owner, ended in an ugly lawsuit.  I don’t have to tell you how that affects the day to day operation of the business.

Conflicting values.  Here’s another very big reason partnerships usually fail.  I am sure that you will agree that everyone’s values are different.  Some people are perfectly content to work around the clock to be successful.  They will give up sleep, food, and comfort until they reach their goal.  Others, want a more balanced life, while yet others have no desire to leave the couch in front of the TV.   Note, that the couch potatoes are generally not business owners.  But, you get the idea.  That conflict of values between people will create disagreements over company direction, operations, treatment of employees and finances.  Resolution on values based decisions can be painful.

I could go on with other reasons why business partnerships usually fail.  Instead I will sum it all up by saying that partnerships are just like being married.  If you are married you can relate to that.  Ultimately, a business works well and runs the best when there is one person at the top of the hierarchy.  That one person is solely responsible for the final say on things.  Only then, will there be no excuses for the decisions and the outcomes.