What Spoils a Business Partnership?

by tedeytan

What Spoils a Business Partnership?

Article by Nina Kaufman

Copyright (c) 2010 Ask The Business Lawyer

Business partnerships go wrong for a variety of reasons. Many business owners forget that a business partnership has two components ' partnership and business. Women entrepreneurs tend to focus on the relationships in a partnership, and less on the monetary aspects of business-building. Here are some lessons learned (real names not used) about business partnerships:

1. If you're not earning enough, get out. If your start-up phase exceeds the gestational period for an African elephant, you may have to face that what you're doing, how you're doing it, or those with whom you're doing it isn't working. You must meet your personal expenses. Just as you wouldn't dream of taking a salaried job that underpays you, so your business should not underpay you. This means you need to be mindful of your needs as they grow and change. When Laila started her business, she was single. By the time it ended, she was married and actively trying to get pregnant. These lifestyle changes gave Laila a totally new perspective on work, the time she wanted (and could) spend, and the amounts of money she needed to generate to support her family. Your purpose in life is not just that you work for your business – your business needs to work for you.

2. Financial literacy is a Must. Many business owners dislike dealing with financial statements. Ignoring the P&L statement or the balance sheet is similar to running a business with blinders on. Painful as it may sound, you need to be financially literate to figure out where your business is going ' and to find outside help to help you fully understand the figures.

3. What is your partner's mindset towards money? There are some telling signs as how they are going to cope with shared business finances. Look to how they handle their own finances. Are they always leveraged, or are their personal finances in good order? Have they filed for bankruptcy? Do they have bad credit? What language do they use with regards to money? Are they always complaining of being broke, or they do have a positive, prosperity consciousness? Ben partnered with someone who was always complaining about being broke, and it took him a while to recognize that his partner's underlying negative mindset affected their business decisions.

A business partnership can work out beautifully ' if everyone understands clearly each other's goals for business and personal finances. A business partnership has to focus on business and profitability, or else it is doomed from the start.

Forming and maintaining a successful business partnership can be tricky. Renowned business consultant David Finkel gives tips on creating a successful business partnership. See more videos and how-to business information at allbusiness.com
Video Rating: 4 / 5

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