15 Reasons Why Most Partnerships Fail

Why do most partnerships fail? In my experience, it’s because—

1. no one is really in charge
2. partners battle over unequal contributions either in terms of sweat equity (workload) or money
3. the decision making process is ill-defined and takes too long
4. one partner thinks the other one will take care of problems/seize opportunities when really no one is
5. they argue over their partnership agreement, which is like a prenuptial agreement—agreeing to the terms of a divorce before you get married
6. differences of opinion on who to hire
7. differences of opinion on who to finance with and how
8. no one is really controlling costs
9. no one is really taking responsibility for sales
10. the new enterprise eventually becomes an orphan while the principals and erstwhile partners look for better opportunities where they can deploy their creativity more freely and put in “100% of the effort to reap 100% of the rewards”
11. the partners don’t really share the same values, vision, goals, and plan for the business

Go a Bit Faster at First with a Partner, Then Much Slower and Plateau Out Sooner

12. one partner has significantly more financial resources so, when there is a call for capital, they end up owning more and more of the enterprise
13. they argue over how to divvy up income from the business, and how much to reinvest in the business
14. they fight over succession planning especially as and when their families get involved
15. there is a breakdown of trust, especially during trying times.

So consider this: if you can, whether you are starting a
real estate investment business, a service business, buying a franchise or
possibly even launching a tech firm, go it alone. If you can’t afford it or don’t yet have all the skills, wait
a bit until you’ve found a way finance your launch on your own (ie, sans partner(s)) or hire the skills you need paying them with anything other than equity.

Sometimes the slower you go, the faster you’ll grow, https://profbruce.tumblr.com/post/153170020324/the-slower-you-go-the-faster-you-grow.

@ profbruce

Bruce M Firestone, PhD
Real Estate Investment coach
ROYAL LePAGE Performance Realty broker
Ottawa Senators founder
6137628884
bruce.firestone@century21.ca