Keeping Good Small Business Records

Dirty Little Secret of Business Partnerships

As a Coach & Lawyer for the past 25+ years, I’ve just about seen it all.

Especially when it comes to business partnerships and agreements.

Normal, rational folks – people who started out as best of friends – going toe to toe in the courtroom, with high priced lawyers and court fees going through the roof. I’ve seen partners sue each other simply on a misunderstanding, and I’ve seen spouses of business partners influence – and ultimately ruin – the very partnership itself. But when it comes the “dirty little secret” of partnerships, I think it’s this: You are not going to get everything you want. And when you say it out loud it sounds silly, but you’d be surprised.

I think a lot of people don’t take that into account BEFORE going into partnership, which in my mind is one of the key drivers behind the sheer volume of adverse legal action in this country.
People didn’t get what they wanted. (Or at the very least, not what they expected.) And instead of walking through the “5 Steps for Resolving a Dispute with Your Business Partner” (an article we’ll post later!), they run for the nearest courthouse (with lawyer in tow), and start screaming bloody murder!

Now to be sure, there are certainly occasions where going to court and having a good lawyer are absolutely essential. As a lawyer. I speak from experience. But I think a lot of that could be avoided if more people understood going in that they are not going to get everything they want out of every business decision inside their partnership. And in most cases that’s ok!

So let’s step back for a moment and think about the reasons most people go into a business partnership:

1. Access to capital.
2. Access to expertise.
3. Access to other people you might not otherwise know.

Yes there are other reasons, but those are what I call the big 3 motivations when it comes to starting a business partnership.

Now in order to get any of those benefits, there are obviously going to be some strings attached! Namely that you have to at least talk to your partner about major decisions you’re consider as it relates to the overall partnership. And people being people, some natural disagreements are going to arise, which again, isn’t a problem.

The problem comes when:

A. You don’t anticipate those situations, and
B. You don’t have a process in place for handling them.

So for the first part, that’s what we’re talking about right now. Recognize that these situations are going to arise and talk it out BEFORE any partnership deal is struck. Personally, this is why I highly recommend a written partnership agreement in the first place…to help head off any misadventures at the pass. And regarding the second one, the process for handling them in the first place, that as I said before, is something we’ll cover in another piece.

But as far as the “dirty little secret” is concerned…I’d boil it down to expectations. Just know that within your partnership, you’re not ALWAYS going to get your way, or get what you think is best every time.

And know that that’s ok.