Entering into a business partnership is much like getting married. It is crucial to know who one is joining forces with.
Sometimes, partners go into business together filled with optimism and ready to take on the world, only to find that they have very incompatible goals and values. Discovering these things is better done before signing the partnership agreement.
Spending habits
One business partner may want to distribute huge bonuses, primarily to the partners, after a particularly profitable year. At the same time, another might prefer to keep some of the cash to grow and expand the business. This topic will likely come up every year.
Work ethic
If one person supports a healthy work-life balance and the other knows no boundaries when it comes to working hours, this may eventually cause resentment. The first in this example may believe that it isn’t how many hours they work that matters, but how much they accomplish during that time. It is particularly challenging between partners who receive an equal compensation package.
Business goals
When business partners’ goals for the company differ, they could end up at cross-purposes. For example, if one partner wants to ensure that the business lives on for future generations and the other wants to grow quickly and sell, it’s best to know that going in and perhaps choose a different partner.
Regardless of how exciting the prospect of becoming business partners might be, it pays to take a step back and consider compatibility issues and try to imagine the landscape over the long term.