Most articles on partnership talk about only the fiscal and legal ramifications of a partnership gone bad. That’s only part of the story. I have lived the whole sordid story. My partnership of many years turned to Partnersh*t. And it absolutely sucked.
In a nutshell, here are 11 key things that will guarantee Partnersh*t will happen to you. You do not want to end up where I did. I recommend you solve all of these issues BEFORE you become partners. If you’re already partners, then all the more important to clean this up now, before Partnersh*t cleans you out.
1. Assume anything. Assumption is the first deadly sin, not just in partnership but in everything you do. Imagine your cardiac surgeon assuming you are blood type AB as you lay there, chest cracked open and bleeding to death. Assumption is no joke and nobody laughs at a funeral.
2. Don’t bother telling your partner what you do and do not want. Instead, make him or her guess. How silly is that? You’re not Monty Hall and this isn’t Let’s Make a Deal. Don’t force some one to pick Door #2 for you when all you have to do is tell them the gold is behind Door #1.
3. Don’t listen. Instead, talktalktalktalk. Did you know that most people listen with only about 25 percent of their attention, hear about 25 percent of what is said, and after two months, remember only half of that? You cannot learn anything new if you’re talking. So stop yapping and show your partner some respect by listening and hearing what they have to say. If you’re not clear, ask. And guess what? They will do the same for you.
4. Don’t declare your expectations or ask your partner(s) about theirs. Here again, stop the guessing games. If your partner expects to build a monolithic business to one day sell to Coca Cola and you’re thinking more along the lines of something you’ll hand down to your kids, you’re gonna want to know about this before you become partners.
5. Worry more about hurting your partner’s feelings than being honest. I can tell you from experience that the pain you feel in litigation is way more painful (and expensive) than any honest heart-to heart. Good partners must be able to tell each other the truth. Don’t bring anyone into your private conversation with your partner—not your spouse, your friends, your employees and certainly not the lawyers. Once you start that, it’s too late.
6. Blindly trust that a friendship/family relationship is a safe basis for a partnership. While the family-based partnership is as American as apple pie, that does not make it a fool-proof recipe for success. You need to vet a friend or family member as carefully as you would vet anyone you are considering as a partner. Get to really know them before you partner with them. Knowing how Uncle Peter behaves on family holidays is not the same as working with him every day.
7. Split that ownership evenly, just like you would a pizza. Equal ownership is the worst kind. There is always and can only be one boss. Look to Congress to see how well an equal split works if you don’t believe me. Gridlock isn’t just for the government. Someone has to be in the majority.
8. Don’t insist that every partner has skin in the game. You might be saying, “Well, who would do that?” And you would be surprised. Skin isn’t just money. Anyone you are considering for partnership has to bring something significant to the party. If not, you have yourself an employee.
9. Don’t be fully informed about your potential partner’s financial philosophy and situation. Ok, this is no joke. You want to know and see documentation for EVERYTHING: how they feel about money; any bankruptcies; money style; saver or spender; financial values; credit rating and so forth. Documentation to an uninvolved third party is cool. But you want confirmation that what the person is telling you about their finances is the truth. And if they say no, say goodbye.
10. Don’t take the time to create a powerful, written, signed agreement. Can you imagine AMEX letting you charge to their card without your recognizing and confirming the purchase with your signature? For goodness sake, would you let a tenant move in without a lease? Would you buy a house without a deed? Even the dental tech has you read and sign his doc before he cleans your teeth. Yet every day people take on a partner without creating a partnership agreement. And I’m not just talking about the the agreement the lawyers draft that says who owns what, or the documentation from the state saying you are part of an LLC. I’m talking about a real, incisive partnership agreement that takes into consideration your character; how you collaborate; how you communicate; what compensation you want; how you will contribute; and how you will construct and create your business. This is Building A Human Foundation. Do it now!
11. Don’t plan an exit strategy. The airlines won’t leave the ground until you understand the exit strategy in case of trouble. Why on earth would you leave your business partnership open-ended? Sh*t happens all the time—break-ups, mergers, acquisitions, sales, death. So plan for all of it. You can always change your strategy but if you don’t have one to begin with, you’re all the way back to #1— ASSUMPTIONS. And so the cycle continues.
Partnersh*t is a decision. I urge you to choose no. Now you know what not to do. Here’s what you should do: click here and learn more.