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Potential issues that can ruin a partnership
August 31, 2022
You and your best friend have always talked about going into business together. Now, you’re both ready to turn the dream into reality. You’ve decided to form a partnership, and the two of you plan to share equally in the responsibilities of running your business.
A partnership can be a great thing. The burden of decision-making is shared between the two of you, and so are the profits. However, there are also some pitfalls that can put a lot of strain on your relationship with your partner.
Watch out for these partnership pitfalls
Before you and your best friend form your partnership, it’s important to take a realistic look at potential pitfalls. These include:
Not having a formal agreement in place. Take some time to figure out how you will address problems as they arise. Make sure to include this in your partnership agreement.
Expecting the friendship to last if the partnership fails. No matter how you approach it, the business has to come before friendship. This can create problems between you and your partner that could potentially end your friendship.
Starting a partnership because you can’t afford to hire help. If you can’t afford to start a business on your own, you can’t afford a partnership, either.
Loss of autonomy. This can derail your partnership if either of you is unable to compromise when necessary.
Not having an exit strategy. You need to have a clear plan in place that allows either partner to walk away if necessary. This should be included in your partnership agreement.