7 Critical Business Partnerships Mistakes To Avoid

by Tanya May 06, 2022

Unpopular opinion: one of the cleverest ways to grow a business is to team up with another company.

Partnering up offers a multitude of benefits, from access to other skill sets as well customers.

as more customers. But for a partnership to succeed,  it requires alignment between the two parties and stable management.

Here are the most common factors that cause business partnerships to fail:

1. Misaligned goals

Before getting into the partnership, be sure what every party wants from the relationship. Is it to sell more? Gather better data for marketing? Increase retail locations/opportunites? Cross-sell? Improve tech to come up with a better solution? 

In fact, a shared goal is also important when you outsource.  IT support companies like The Final Step have all kinds of support for businesses, but what makes them different is that they are not just a service provider, they are an equal partner that is interested in growing your business and seeing beyond immediate solutions. They’ve helped the business to recognise their goals.

2. Lack of motivation

Motivation and drive are important elements for any business to work.

One of the biggest reasons partnerships fail is because one side is not fully committed.

Both sides need to be willing to put in adequate effort.

How can you tell that your hunger to succeed matches?

You need to have a deep and honest conversation before you commit.

Ensuring that both sides have a mutual sense of accountability will involve ascertaining if the partnership is a beneficial one on both sides. 

3. Not setting clear expectations

It’s important to be direct and outline the desired outcomes from the beginning.

This doesn’t just set a precedent, but it also will help you to determine if the partnership is going to be successful in the long run.

We always have to define what success looks like and then work our way back so we can put the relevant work in place to secure a productive and professional partnership.

4. Not assessing the progress continuously

 Much like a business plan, you need to create a partnership plan where you clearly outline everyone responsibilities, output and timelines. And most importantly – continuously assessing the progress and pivoting if needed.

People need to feel that they are accountable and mutually dependant.

Don’t confuse dependence with being needy. Being dependent just means you’re better off being in a partnership than not.

5. Not incorporating balanced rewards

Partnerships can dissolve over time because one side is benefiting more than the other.

And there are many reasons why the cookie crumbles this way. It could boil down to a lack of effort on one side, but it could also so be due to the rewards benefiting one side more than the other.

In order to make a partnership work, you have to agree on who is inputting what so both parties can benefit equally.

6. Misalignment in reputation 

Rather than looking for a smaller business to prop yourself up, work with companies that offer a very similar level of service (in terms if size, years in the market, customer demgraphic etc) and have the same reputation as you.

This familiarity is important because it’s almost like shorthand of sorts that can facilitate the right levels of communication. Plus, you probably learned the same lessons along the way, which makes it easier to work together. 

Both parties should have a high level of performance to give the business the best chances of thriving.

7. Difference in risk tolerance

Running a business is risky and requires a certain level of risk tolerance.  Ideally your risk tolerance should be somewhat aligned with your business partner.

If you’re a risk-taker and your partner is risk-averse, it could lead to a fallout.

Be sure both parties are aware of the risks and are in agreement to the degree of risk the business takes.

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The first Millennial blogger in the UK. Twitter @_luckyattitude

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