What are the Main culprits of partnership failure?

[Mr Priceless]

And on the flipside, what are the main culprits of partnership SUCCESS?:cool2:

Yes, I've done research on the topic, and a big thank you to all that contributed your knowledge and experiences with partnerships in the past.

Speaking from my own personal experience, a good friend of mine and I teamed up on the biz to help knock out yards faster. As far as the investment in the biz went i'd venture to guess that about 20% of the time is was me 85% him 15%. But 80% of the time it was about 95% me and 5% him, because my equipment was by far the most often used. Didn't bother me. Whatever repairs occurred most of the time we halved up the bills and later took turns on repair costs or whatever the senario was and we were both fine with it. Whatever income was made was 50/50.

more to come later....
but feel free to post ur oopinons

[br549oicu8]

Words for that partner...
"HIT THE ROAD JACK.....AND DON'T YA COME BACK NO MORE....."

[AI Inc]

In this industry , by the time ya split , there isnt a whole lot there.

[mowing grass 1111]

i had a business partner ( brother inlaw) for years and during that 2 years my business grew by 50% .. it worked very well for me. we have talked about expanding this year so he might be coming back in as a partner at a 60% -40% deal..
if you do anything just dont take advice from someone that has failed at a partnership ...that should be the first sign that they dont know what the hell they are doing

[jnlenterprise]

First off let me start by saying that almost all 50/50 partnerships fail. The #1 reason is that one of the partners always thinks he is putting out more effort than the other or brings more to the table than the other. I started out my business in a partnership and it wasn't long before I got tired of splitting up the money 50/50 when I was putting in 25% more time, now I am willing to bet my partner thought he was putting as much if not more than me. I would not take mowgrass1111 seriously since his only partnership was with family and to say that taking advice from a failed partnership is bad advice. When I started my partnership our attorney told us from the beginning that 50/50 does not work and that most split up but we thought we had a good mix of experience to prove him wrong. In this business the net margins are low and its tough enough for one person to make a good living let alone splitting up the money. I did learn from the experience, partnerships don't work. If you want a partnership then I would suggest it not be equal, this way you can dictate the way the business grows and goes. Another way to look at it is from a financial stand point, for every dollar you want out of the business your partner gets an equal amount based on the pecentage of his ownership. I did know a company that was very successful with 3 partners (not equals) for a time and they had a great mix, one was an accountant, one mechanical and one from the field. In this case they complimented each other, but eventually it failed for the finacial reasons I laid out. The accountant type wanted to be paid $100k plus and travel but the company could not afford to have 3 owners taking home six figures and they did about 2.5 million a year.

[Az Gardener]

I also had a brother-in-law partnership we worked well together and made good money. It did not end up as we set out as far as duties went and I was very frustrated most of the time. Ultimately what split us up was me as I wanted the business to go in one direction and he was more concerned with making money now.

My business is like one of my children. I don't raise my kids like my brother-in-law raises his, so I guess I should have seen it coming.

Everyone that is independent enough to start a business is pretty strong willed.
Not likely to compromise too much especially when your family's livelihood is at stake. I suppose if you have one visionary and one work horse and both are content to keep their roles indefinitely then it could work.

[Johnson LCO]

I have seen some partnerships fail. It seems that if you are upfront with eachother and arent afraid to communicate your thoughts you should be ok. Partnerships are great if you have a small amount of money to invest because you can pool money, but if you have enough money you should go it alone. My twin bro and I have worked for a landscaper and this will be are first year on our own. As far as decision making and equipment purchases it has gone smoothly but we will see. I think we have a distinct advantage though because we think exactly alike. Make sure you have a thorough written agreement so you can refer back to it in case of an argument.

[JB1]

partnership is no different than a marriage, you have to work at both to make it work.

[joesimoes2]

Look at it this way want vacation in the summer get a partner:drinkup:

[mowing grass 1111]

try to find examples of a partnership that works i would not take advice from anyone who failed at something so simple

[Stillwater]

distribution of labor and money

[Mr Priceless]

thank you all for the posts. Much appreciated.

Well, the culprits that caused my partner and me to split were my parents unsettled feelings towards him using my equipment, when technically they had nothing to do with my assets in the first place.
I'm sure income would have eventually wound up as #1, but it was because my equipment (homeowner grade) made frequent stops at the shop.

We both worked as hard on all jobsites and kept each other's spirits up to finish the day up. I thoroughly enjoyed the teamwork and my friend and i stay good friends even afterwards.

Most all reasons listed on failure seem to have a relatively easy solution to them, although i won't preach hindsight.

[Kortas]

Partnerships are like wives, sometimes you love em, sometimes you hate em. But you have to be compansionate about them to make them work.

But to make a comment like don't take advise from a partnership that failed, is just plain "unsmart", for lack of a more expecit phrase.

I have been involved in multiple partnerships. Here are my experiences, failers and not.

1st Partnership: about 5 years ago. It was in the mortgage industry, not the green industry. We both had successful shops but in different ways. We merged together to become the "powerhouse" that we truly could have been, but it just didn't work. Why? becuase we had two CEO minded people with only 1 CEO job. We didn't split up the work responsibilities like we should have. This person was also not a friend of mine so we didn't trully understand how we each ticked (rule #1 in the future). We didn't put each other in the other person's place when we argued, it was selfishness at it's best. Although I still feel I was right most of the time, I'm sure I could have thought of how he thinks, and feels on a situation, (not how he feels, and I think, it has to be how he thinks) and vise a versa and it could have worked out. But it ended in 4 months like a bad marriage to a girl you met and married in Vegas after knowing her for 1 night. Both of our companies went from successful to struggling after that.

2nd Partnership: Also in the mortgage industry and started about 4 years ago. I decided to allow a long time employee/friend as a partner due to financial (after the other partner) and managment needs. We both knew I still pulled the strings in the organization and it worked out very well. It is still successful to this day. Although he has more decision making ability now, this works out for me so that I could ventrue into other things. He runs the operational part of the company and I run the creative part (marketing, budgets, hiring, etc.). We both understand how each other thinks (although we don't always agree) and we both have respect for the other. When we dont' agree, we argue, a lot, but that's not bad as we both know we are on the same team at the end of the day. Each partner has to understand that arguing is good, in fact it's great as long it's in the good of the business and each person understands up front that they will each have to give a little. Arguing is what gets business done.

Partnership #3: Yes, it's in the green industry. I partnered up with in-laws last October to create the landscaping company. I had experience years ago, and most of my experience is running a company, not doing the work. It was agreed early on (4 partners, too many!!!) what each other's role would be. Mine was to be business details and running all office duties. The others were work/financially motivated partners. It failed miserably!!! The problem here is that too many people were out for themselves and that nobody cared what the other's thought. Each had "other income sources" and too many put those income sources above the company and work didn't get done. Anything company related, didn't take priority enough as there were just too many hands in the pot, and everyone's early agreements on work functions was just plain not working like agreed. I ended up having to help the crews get work done instead of doing the office work only.

4th Partnership, in the green!! I partnered up with my childhood friend who is to say the least, more blue-collar than I am. I am deffinately into working in my business, not on my business (e-myth to it's finest, I may be in the landscaping and mortgage industry, but I never mow a lawn or do a single loan. I run businesses, that's what I do). I have no true motivation to work in the field, I have to admit. My passion is creating a company and watching it grow. Phil's passion is working with his hands. We both had experience in this industry years ago and we both understand each other very well. We think of how each other feels about a situation, not how "I" feel. It is working out very well, and that's simply because of compassion about the other person, and how they think, not how I think. We have been in business since the end of December (1.5 months), we have 42 full service accounts and over $6k in maintenance revenue going into March so far. We anticipate over $10k in revenue total for March to include one time clean-ups. I run my side of the business, like a corporation, that just happens to do landscaping services. Phil is passionate about doing a good job, and we each understand how each other thinks. It will work out fine.

In short: I think a partnership will ONLY succeed if the partners understand how the other person thinks, not what they think. Put yourself, and vice a versa, in not only their shoes, but in the way they think. If you have a situation that is being argued, think not only of why they are thinking that way, but how they think and interpret. They need to do the same for you. If you are compassionate about how/why the other person thinks, then you can come to terms that is best for the company. If you are not, and either of you go with the F*#$ him mentaility I'm right about this one, good luck, if you were friends, you won't be soon.

But PLEASE, don't take the advise that taking advise from a failed partnership is bad. It's not only good to get the positive side of a situation, you also need to know the bad side and experiences of it, before making a decision of if it is right for you. That way you know what not to do.

(Over 99% of all successful businesses are derived from someone who has failed at another. They got up and learned from their mistakes, and didn't do it again. Learn from their mistakes yourself, and you run the better chance than the guy next door of not failing. Listen to failure stories, they usually end up as success stories if tried again.)

[LB1234]

We have one, 50/50 split between my brother and I. Going on 8 years now. I think one of the keys is having a business plan in place with roles and responsibilities clearly spelled out AND both partners signing to it.

I would be interested in the partnerships that failed whether or not they broke up b/c the business failed or was it actually the partnership that failed.

Do we get into our arguements, hell ya...but its usually over very quickly...we wouldn't be human if we didn't argue. We both bring different traits to the company, we actually compliment one another. I can honestly say I wouldn't be in the business without him.

[Two Seasons]

Partnerships are like wives, sometimes you love em, sometimes you hate em. But you have to be compansionate about them to make them work.

4th Partnership, in the green!! I partnered up with my childhood friend who is to say the least, more blue-collar than I am. I am deffinately into working in my business, not on my business (e-myth to it's finest, I may be in the landscaping and mortgage industry, but I never mow a lawn or do a single loan. I run businesses, that's what I do). I have no true motivation to work in the field, I have to admit. My passion is creating a company and watching it grow. Phil's passion is working with his hands. We both had experience in this industry years ago and we both understand each other very well. We think of how each other feels about a situation, not how "I" feel. It is working out very well, and that's simply because of compassion about the other person, and how they think, not how I think. We have been in business since the end of December (1.5 months), we have 42 full service accounts and over $6k in maintenance revenue going into March so far. We anticipate over $10k in revenue total for March to include one time clean-ups. I run my side of the business, like a corporation, that just happens to do landscaping services. Phil is passionate about doing a good job, and we each understand how each other thinks. It will work out fine.

In short: I think a partnership will ONLY succeed if the partners understand how the other person thinks, not what they think. Put yourself, and vice a versa, in not only their shoes, but in the way they think. If you have a situation that is being argued, think not only of why they are thinking that way, but how they think and interpret. They need to do the same for you. If you are compassionate about how/why the other person thinks, then you can come to terms that is best for the company. If you are not, and either of you go with the F*#$ him mentaility I'm right about this one, good luck, if you were friends, you won't be soon.

But PLEASE, don't take the advise that taking advise from a failed partnership is bad. It's not only good to get the positive side of a situation, you also need to know the bad side and experiences of it, before making a decision of if it is right for you. That way you know what not to do.

(Over 99% of all successful businesses are derived from someone who has failed at another. They got up and learned from their mistakes, and didn't do it again. Learn from their mistakes yourself, and you run the better chance than the guy next door of not failing. Listen to failure stories, they usually end up as success stories if tried again.)

Could not have said it better myself. This is my fourth business venture, the first three with the same partner. We still get together for coffee and talk about opportunities. My business partner now is my wife who brings alot to the table with a woman's eye and the things they like to see. If it were up to me, every patio would have a barbeque and a wet bar :laugh:

[americanlawn]

One year in a partnership was enough for me. I was coming home at 9:00 p.m. many nights. I was the only one who worked Sundays. Most Saturdays, I was still working while my partner was at the local bar. Finally, I offered to buy him out. He refused. Then I asked to disolve the partnership and get back my investment money. He said, "Sue me". So I did and won in a court of law. I did not get all of my money back cuz he threatened to file barkrupcy, but at least I got some money. He made monthly payments over a 1 1/2 year period to pay me.

I now own my own company with over 3000 customers. My former partner now works for a local competitor-----------lawnservice - you know who it is.

[lawnprosteveo]

One guy will want to by the new shiny $10,000 mower and the other guy wants to stick with the slightly used walk behind.
One guy wants to work Saturdays and the other guy doesnt.
One guy wants to fire the PITA customer and the other guy wants to accommodate them.
For me, partnerships just dont work....

[corey4671]

try to find examples of a partnership that works i would not take advice from anyone who failed at something so simple

I could not disagree more. I would rather learn from someone else's mistakes than make the same ones they made. Zig where the failure zagged. The first part of your statement is true. Why not take advice from both. Look at what the success did compared to what the failure did and you get the V8 moment!! DUH...THAT'S why the failure failed!!

[ED'S LAWNCARE]

I started in this business with a partner, jumped in full time no clue what was going to happen. Big mistake there. We bought all the equiptment with a loan that was secured by a 15k cd I had, and used my personal truck. The first year was rocky at best we ended up with 18 accts and plenty of mulch and yard installs.

The second year I realized that we needed to educate ourselves more and inrolled in a turf management course. Since we needed more income we started working evenings. Then he started with as we did bids, lets bid this cheaper for cash and put some money in our pocket today???WTF I have all this money securing this loan I want it paid back. Then he started with I could make more money driving truck during the day instead of the evening. After listening to that for about a month I released him of any obligation to the loan, basicallly bought him out of the business with no money out. Used my secured money to pay off the loan, and went on my way. I now do this part-time and loving it as solo owner. BTW we are still friends, he just thought we would make a mint early.

The sad news is I was working day shift 2 days on 2 days off. This enabled me to run and work the business. Well I was just notified that I will be going to 8 hours 5 days (day shift my choice for my family). This will leave me very little time for growing my business. I am going to keep what I have and not look for any new work in 08:cry::cry:I could do more but my family time is more important. I know this is more of a personal history but it shows how things between partners can stray. Also I knew this guy for 25 years.

[Edge08]

These posts are excellent and cover the topic pretty well.

Here is what I would look for in a partner:
Connected to the community and has good contacts.
Similar financial situations- if your partner requires more salary to get by than you do, conflict will occur and it stresses your cash flow.
Similar personal situations- if your partner has 3 kids and you dont have any- family responsibilities will come up that take precedent over the business- another source of conflict.

A partnership does have great advantages. Vacation time, more networking contacts, easier to make up work when behind. It works when responsibilities are CLEARLY divided. I ran the design/installs, my partner managed the maintenance. We were each accountable to each other for hitting budgets and projections. If one of us did not have a good month, the pressure was on to outperform the next month.

There is a lot of give and take, you can't win every battle and have to make sacrifices sometimes. That's very difficult to do for creative, entreprenurial individuals.

[Valk]

If you bring 30 accounts to the table and your partner brings 30 accounts to the table...in essence, you will not make any more money AND will be driving a lot more between these 60 accounts. If 10 accounts get added, you benefit to the tune of 5 of them...

There are certainly some benefits to having someone else to take up some slack here and there...but the potential issues that can arise with a shared business like this seem far too risky to me.