Whether they are a partnership at law, most smaller businesses – and many large ones – are based on the idea of ‘partners’.
I’m guessing most of you reading this have a ‘partner’ in business regardless of whether you have company, a trust structure or whatever.
Partners jointly make decisions as to how a business is run. This means that the businesses will have all the dynamics – good and bad – of a partnership. It can be nimble and decisions can be made quickly. There can be conflict between the principals, who tend to be strong willed people. Invariably, there are disputes – I have never seen a partnership without them.
‘Partnerships’ in business are interesting because so many of the characters involved are similar. They are not 9-to-5 types. They are driven and committed. They have strong opinions. They take a great deal of convincing that something should be done contrary to their opinions.
This can cause problems. I have seen businesses fail because of these types of conflicts between partners where two strong willed individuals fail to compromise.
How can you mitigate these sorts of risks? I’ve developed a few strategies that have worked over the years.
The first is a piece of advice my first boss gave me.
He said, “Matt, in business you are going to disagree. Let the little things go and only fight the fights that are worth it.”
We can waste so much energy ruminating and arguing about stuff that is insignificant.
Second, agree before you begin on how disputes will be settled. Have this documented. Then there is a known process to follow when there is a dispute. As long as the process is followed, no one can be dissatisfied with the outcome – after all, you signed up to the process.
Partnerships can be great but they are hard. Ben Elliott and I are in one right now. We are two different people with different ideas. But we have understanding and patience to work with each other. The more upfront you are and the more you prepare for the inevitable disputes, the more likely you will be able to survive them and prosper.