subject: What Spoils A Business Partnership? [print this page] Business partnerships can spoil for many reasons. Often for the important (and overlooked) reason that a business partnership is about two things: partnership and business. Women entrepreneurs especially tend to look to partnerships for the relationship benefits, not the monetary benefits. As a result, they don't focus sufficiently on the business (money) considerations. In the spirit of reflection, here are some hard lessons learned (names changed or omitted to protect the embarrassed) about money and 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. Be cognizant of your partners' financial mindset. Do your partners have a prosperity consciousness or do they have a negative mindset with regards to money? Are their personal finances in order, and their checkbooks balanced? Are they constantly in debt? Have they declared bankruptcy? What is their approach to money? The answers to these questions are telling of how they will approach your joint business finances. John previously teamed up with a partner who was constantly negative about money and often decrying that he was broke. It took John a few years before he recognized how that poverty consciousness colored everything the partner did in business with him.
To make the best out of your business partnership, ensure that you and your partners are clear about your goals for business and for personal finances. To be profitable, a business partnership needs to be about business building and making money. To think otherwise is to jeopardize the partnership.
Copyright (c) 2010 Ask The Business Lawyer
by: Nina Kaufman
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