There are many benefits to running your business with a partner. It allows you to share the startup costs and workload with someone else. It can also be a way for two individuals with different skill sets to come together. While this can help them succeed, it may also cause them to fail.
As many as 70 % of partnerships fail. Two of the reasons they do aren’t all that surprising.
Going into business with the wrong person
Many individuals rush and start a business with a family member or friend because it’s someone that they know. Some analysts say that they should focus less on the ties that bind and more on the skill set that each party brings to the table though.
One problem in going into business with a loved one is that it’s often too difficult for partners to separate their company’s dealings from personal ones.
When spouses go into business with one another, they often end up divorcing. The company fails too. This happens because it’s hard for them to discuss finances or business goals without conversations turning more personal in nature.
Inequitable distributions of workload
Partnerships also often fail because one partner invests more financial resources in it than the other. The other one may promise to put in more work, yet they fail to do so.
It’s possible for one party to put in more money and the other increased work and make things work. Each partner has to have a clearly defined description of tasks that they’re expected to complete though. This is especially the case if they’re putting “sweat equity” instead of financial resources.
Owners aren’t often able to anticipate tasks that need to be performed though. It may be hard to complete a checklist of tasks that are expected early on or to assign a monetary value to them.
Partnerships often fail because prospective partners rely on who their heart is telling them to go into business with. They often fail to think about what’s the best option for forwarding their ideas. They also fail because partners start running their operation without having clearly designated responsibilities or because they’re on an unequal financial footing with one another.
An attorney can help you efficiently handle breach of contract and other business disputes that you may be facing here in Statesville or the rest of North Carolina.
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