This type of scenario can come into play at any point in your business.
Early in the life of your business this could mean launching with a mismatched partner or taking on funding from a less than desirable investor.
Business Partnerships can be a favorable way to launch a business by combining a shared vision, complimentary skills and capital from multiple sources. However, many business partnerships end on bad terms. In many cases, this is due to the business partners failing to plan or making preventable mistakes. A business partnership is like a marriage; you go into it trusting, with the best of intentions and plans. “Nothing can possibly go wrong- but, if it does, we will face it together!” In real life, unfortunately, things are rarely that neat. In business, like marriage, people change over time, different personalities clash, priorities change, and trust can erode. Every partnership is NOTdoomed to end badly. That also means a good partnership will NOT be completely without conflict or dispute.
You might be thinking, this seems like a lot of unnecessary stress why on earth would I want to take on a partner? In truth, as much as a bad partnership can tank a business, a good partnership can skyrocket a business. Think about some of the most successful business you know (Google/Apple/Twitter/Microsoft/Ben & Jerry’s) all of these companies started with a partnership. The most common trend in a successful partnership is a recognition of your own individual limitations and a respect for what the other person or people can bring to the partnership.
As your business progresses, doing business with the wrong people could mean hiring a bad employee, ordering from a dishonest vendor, or taking on a client with unreasonable expectations.
Doing business with the wrong types of people can cause countless problems for you and your business; think unnecessary and costly lawsuits, failure to meet promised deadlines, and lost profits. All of that adds up to a lot of unwanted stress.
When starting a business, it can be difficult to be discerning about your clients because you want to start making money as quickly as possible. One of our biggest mistakes we made early on was taking on clients and projects we knew weren’t a good fit. We did this largely so we could pay the bills. So, we strayed from our core competencies, took on work outside our skill sets, and agreed to work with difficult clients with unreasonable expectations. As you would expect, some of those engagements ended poorly, and the ones that didn’t caused countless sleepless nights of stress and worry. Even though it doesn’t seem like it in the early stages, try to remember, you can afford to and need to be discerning about the types of people you do business with.
As your business grows, employees will become a necessity. A business can only be as successful as its people, and this is particularly true for smaller businesses that must rely on every team member pulling their weight and creating value. A strong hire can boost your profits, reputation and morale. On the contrary, however, a bad employee can do just the opposite, costing you clients, money and existing staff
In any of these instances, you might be “knee deep” in a relationship before you realize it’s a bad match. So what steps can you take to ensure that a bad business relationship doesn’t derail your company?
• Take your time – don’t rush into a partnership, or hiring an employee, or siging a contract with a vendor. Explore your options and make sure it’s the right fit before you jump in head first. When considering entering into a partnership with someone or doing business with someone, it’s very important to do so carefully and with your eyes wide open. This is especially true when the potential business relationship with a friend or family member. Remember you need to be discerning about the people you do business with.
• Don’t let a bad relationship linger – on the contrary, once you realize the relationship isn’t a good fit, don’t wait around to see if it will get better.
• Communicate – make sure you clearly communicate your objectives and plans to a potential partner, new hire, or client and make sure you understand their objectives and plans.
• Finally, and probably the most important, get everything in writing. By making sure that all parties have clearly defined roles and responsibilities you can usually keep a minor issue from turning into a business ending conflict.