Strategies to Keep Your Partnership Afloat

I used to listen to the Dave Ramsey radio show a lot before I switched to podcasts. Dave often says, “The only ship that doesn’t sail is a partnership.” While some partnerships do work, many either fail or are headed towards failure.

I’m actually in a business with other owners who are close family members, which is often seen as a risky move. We’ve had plenty of conflicts over the years, but being in this partnership has made our business better in many ways.

Even though I generally agree with Dave Ramsey’s advice against partnerships, there are times when they can make sense for you. If you’ve ever seen Shark Tank, you know the entrepreneurs on the show often make quick partnership decisions. But in real life, the due diligence happens behind the scenes, and many of those on-screen deals don’t actually go through after a thorough review.

Starting a business with someone, choosing a partner, or buying a business should be done slowly and carefully. Get a lot of advice, talk to people who have made similar choices, and really get to know the other person. If the opportunity feels rushed, it might be best to pass on it.

Many partnerships begin out of convenience or perceived necessity, but like a marriage, a business partnership is a long-term commitment. There are good reasons to choose a partner: their expertise, temperament, leadership skills, financial discipline, and work ethic. The best reason is simple compatibility. Do you enjoy being around this person? Can you talk easily with them? Do you share a similar vision for the business?

If your main reason is that you need their money, you should think twice. Unclear expectations can lead to disappointment, especially in a partnership. Make sure everything is clear on paper: who owns what, who is responsible for what, time commitments, earnings, what to do if things go wrong, and what happens if one of you wants out.

Also, consider issues like who makes the final spending decisions, what happens if one of you becomes unable to work, and how you will buy each other out if necessary. Discuss everything in detail and put it in writing. It helps to involve a coach or mentor to work through the details.

If something starts to cause tension between you and your partner, address it immediately. Bitterness and backstabbing can derail the entire business. If the partnership is falling apart, deal with it sooner rather than later. For serious partnership discussions, agree on some ground rules beforehand.