Last week, Estadão released an article where our partner Rafael Duton discussed the five errors that could end any partnership in the business world. Click here to read the original article in Portuguese or continue reading below for a summary in English.
Five Errors that could end any Partnership in the Business World
The reasons to have a business partner are endless: having someone to share difficult entrepreneurial moments with, expanding your contacts, increasing capital. While the list of pros goes on and on, it is important to address the challenges that can arise when working with a partner. Rafael Duton explains that “it may not be easy to find a partner, but it is still the best choice a businessman can make.” Here is a list of five crucial errors Duton states that could lead any partnership to fail:
Falling in the trap of a best friend
While friends and family are often likely candidates for business partners, it is not recommended. It is important to address the needs of the business before the proximity of a relationship. If something goes awry in your family or friendship, it will affect your business.
Skipping the “relationship phase”
The “relationship phase,” according to Duton, is a two-three month period where partners can start working together before “formalizing the union.” In this time, the partners can informally put the business together and observe if they have the same values and perspectives.
Lack of a Specialized Partner
Money and compatibility are not the only components of a successful partnership. It is fundamental that at least one of the partners has experience and expertise in the business sector. Without this balance, the partnership could fall apart.
Partners that don’t have aligned personal expectations in front of the challenges they will face will have a difficult time in the long run. “A business where one partner wants to have publicity in magazines, one wants to sell, one wants to grow and another wants to stay small has a serious problem.” Duton suggests that the solution is to form a psychological contract – a type of constitution describing guidelines, responsibilities and politics that the team can resort to in the case of crisis.
Money for Money
Rafael highlights that “a partner who only thinks about money, is not good.” It is important to look for partners who, on top of having money, have experience and contacts. “Money alone doesn’t solve anything, that is why I don’t look for partners who are just investors.”