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Why Business Partnerships Fail: Top Reasons Why & How To Prevent Them

Why Business Partnerships Fail: Top Reasons Why & How To Prevent Them
Top 4 Reasons Why Business Partnerships Fail

Sitting in my room, I was ecstatic and ready to jump out of my clothes.

I've never felt such a powerful sense of happiness and fulfillment like this.

It was the feeling that I've finally figured out what my life calling, my purpose was.

Something inside me told me not to go this alone.

Maybe it was my fear of failure.

Maybe it was the fear of succeeding alone.

Maybe my body knew that I wouldn't be able to succeed alone.

It wasn't very long after I discovered the marketing agency business model that I reached out to two of my closest friends and told them that we should embark on this venture together.

I had come to the conclusion that we all wanted the same thing out of life, a better, brighter, more abundant future.

As I had expected, both of them were equally as excited and ready to make this happen.

I was telling them how great this business is, "All we have to do is learn about marketing and we'll be able to find clients that pay us thousands per month to do their marketing."

The marketing agency model is great for many reasons.

  • You're able to automate and delegate it
  • You're able to maintain high margins
  • You can have a ton of free time on your hands
  • No need for a physical office
  • You can start with $0

What was there not to like about it? The barriers to entry were minimal and therefore I had bought them into the vision.

The thing is, however, I've known these two for years.

Therefore, through all the excitement and willingness to hop on board, I foresaw what the future could have in store for us.

I could see that there was a good chance of failure but I was ready to exercise those chances nonetheless.

The only way to succeed, I thought, is if I took the reigns from the beginning.

Since the first day,  I started to give out tasks for everyone to follow - I did the paid marketing and everything else, one person was responsible for learning SEO, and the other was responsible for copywriting.

We jumped on meetings daily to let each other know what we've learned and brief everyone on what our skill is all about.

It didn't take the copywriter long to realise he doesn't enjoy this and made the decision to quit.

However, my friend and I were ready to make this happen - in fact, it just got a whole lot easier.

When I discovered that all we need is a niche and a service to start, I was over the moon.

We kept learning until a few weeks later, we were finally ready to launch.

Whilst I prepared a script for our cold outreach, my friend was making a list of prospects to reach out to.

It was finally time to start reaching out.

We got on a Zoom call to start making the calls together - I was going first.

Being in sales before, I knew the reality behind it, however, I was too high on the dreams and hopes I had sold us to see the reality behind it.

As I entered the first number into the phone, I can feel my heart rate rapidly increasing, pounding, trying to break out of its cage.

"Going door to door was a lot worse than this, why am I so scared?"

It took me a minute or so to compose myself as best I can then I pressed 'call.'

Ringing... Ringing... Ringing... and no answer.

I felt a wave of reassurance go through me.

It was my friend's turn - he called, equally as scared.

The prospect picked up but it wasn't long after he started reading the script that we got the first hang up.

A few dials later, we realised that this was not going to be as easy as we thought - it was the last time we cold called.

The following weeks went by, nothing but procrastination filled the air between us.

I was approached by a virtual assistant which we decided to hire - but a new employee couldn't fix a broken system.

1 month into hiring the virtual assistant, we saw good results, but again, nothing tangible that moved the ball forward.

I could see it coming - my prediction was slowly materializing into reality, and there was nothing but tension as we edged closer to our unfortunate division.

We came to the decision that this was not going to work and so my friend also ended up leaving the agency life.

A promising partnership turned into nothing but dead dreams and hopes that came crashing back down to earth.

That's the tale of 'The 3 Marketeers.'

So what went wrong, why did it not work out?

There are many reasons business partnerships don't work out.

In fact, around 50% or more of them don't work out - one person once told me that a business partnership is like a relationship without the fun.

Every time I remember this unfortunate story, I remember that lesson.

Instead of leaving you on a story, I wanted to go a step further and explain exactly why a business partnership never, or rarely, goes well.

The alignment in vision

Why Business Partnerships Fail: Top Reasons Why & How To Prevent Them

The most important thing to look for when you're looking for a partner in business is the vision.

What are their goals?

What is their vision?

What do they want out of life?

What do they want out of the business?

In most cases, you're going to want to find someone with very similar goals and visions to you.

If you're looking to build the next Amazon whilst your partner is looking for a business that frees them to do anything they like, these visions will contradict each other.

Your compass might tell you to work, work, work, keep pushing, there's still work to do!

However, your partner may start to get complacent early. After a little success, the business has achieved its purpose and so there is no need to keep going for them.

In my case, my friends and I all had different goals - I wanted to transform my life along with everyone around me, I wanted to build something that scales into the multi-million, even billion-dollar range.

My friends just want to make a living, anything else is fine - if it comes, it comes.

They didn't want to build businesses, they just wanted some money to have fun and go out.

These are two completely different ends of the spectrum and so it never would have worked out.

Even if it did, there would have been a fallout eventually so it's always better to see that early on.

My favorite speaker and author of 'Start With Why', Simon Sinek, explained this contrast through a funny story about bagels.

Essentially, he explained, there are two types of people in this world.

Those who go and get what they want and those who only see the barriers standing in the way of getting what they want.

Whilst I was the former, my friends were very clearly the latter.

Setting expectations

Why Business Partnerships Fail: Top Reasons Why & How To Prevent Them

Before starting a business, you're going to have to establish some expectations that you all live by.

Expectations are very simple parameters that ensure you get a lot further along in your business journey.

A lot of people go into a business partnership and think that they're going to have to do the same things since they're splitting the business 50/50.

Although this holds true, each person will have a different role.

You can't have 2 CEOs, you can't have 2 bookkeepers, etc.

When we started the agency, I unknowingly did this, however, we didn't make it official.

It doesn't matter if what you say you'll do, you need to sign on it and make it stick.

Whilst I focused on paid ads, the others focused on something else.

Whilst one person is doing outreach, the others should do something else.

Whilst one person is talking to clients, the others should be getting results.

All of this should be outlined before you start the business.

When people know their roles, they know what they need to be doing.

When a certain role isn't fulfilled, you'll all know who was responsible for fulfilling it.

For example, the salesperson would be responsible for outreach and closing. 

With Hawk Prospecting, although it's only myself currently, I'm having to wear different hats at different times of the day.

The morning is checking if everything is working well.

I have LinkedIn ads running, email campaigns being sent, marketplace listings, customer messages, or reviews.

In the afternoon, I'm doing the outreach.

Later on, it's product development and program applications.

Set the expectations early on so everyone knows what they're doing and what they're signing up to.

It'll save a lot of time and confusion down the line.

I'm currently reading 'The E-Myth Revisited,' and the author portrays this really well.

I recommend reading the book if you're interested in learning more about expectations, systems, and processes.

Treat it like a real business

Why Business Partnerships Fail: Top Reasons Why & How To Prevent Them

You're about to make a choice that will change your life.

For the next 5, 10, 15 years of your lives, you'll be working and pouring your time, effort, and resources into this seed.

To first-time business owners, this can be a very exciting thing to dive into, however, you need to know what you're signing up for.

This is not going to be a walk in the park.

This is not going to be something you can just ignore whenever you want, or work on whenever you have free time.

This is going to be something you focus on for years to come.

It's a real business, an organism you must nurture and grow with all your heart and dedication.

Understand that 90% of people pursuing what you're about to do fail, even more, if you look at unregistered businesses.

You, as the owners, will need to make sure that the seed gets everything it needs, to survive and thrive.

Every day you skip working on the seed, is an eternity of growth ignored.

You might not see anything happening in the first few months or so, but this is normal.

Business is like this - success is not an overnight process.

It's a journey that requires consistency and commitment.

You've got to keep at it in order to see the exponential, compounding growth.

Your whole team must understand what's at stake here.

Entering this partnership is like entering a relationship where you know that there will be a lot of trouble - but as partners, you will work through it.

You will fail, you will lose, you will want to give up, together.

However, you'll also learn and come back stronger, together.

Make sure that everyone knows they've just signed up for something bigger than themselves and that it's going to be a long, difficult journey.

Are you all ready?

Why Business Partnerships Fail: Top Reasons Why & How To Prevent Them

Are you and all your partners ready to make this leap?

Oftentimes, you'll all be at different stages of your lives.

In my case, even though we're all the same age, finished school together, and all dislike university equally, I believe that I'm at a much further stage in my life.

Not in terms of success, not in terms of age, but in terms of my thinking and worldview.

I've been observant of my environment and have quickly realised the reality I live in.

I understand that there is so much out there to explore, I understand there is life outside of education and the status quo.

I've left myself vulnerable to the unknown and embraced the fact that I know little about the world.

I've gone through a lot and started to learn everything I can long before anyone else I know.

I've watched people struggle, whilst feeling powerless, knowing I can't do anything to help.

This has helped me see the opportunity, the abundance that is around us.

It opened my eyes to how fortunate we are and how grateful we should be.

My partners, and yours too, may not yet see what you see.

They don't yet know what you know.

They don't understand why you do what you do.

That's okay - they don't need to. 

It's okay not to be ready to take such a big leap of faith.

I was an 18-year-old boy, with no responsibilities, living with my mother - I had nothing at stake and was able to make the decisions I made.

My friends, however, were in another position.

Aside from their thinking and worldview, they had responsibilities, people to help, people to take care of.

You must always understand your partner's position.

They might have a job.

They might have a family to take care of.

They might be a carer for someone.

They might have kids who need constant attention.

Not everyone will be as ready as you.

It might take months or years for them to be ready.

Just accept that now might not be the best time and it's better to look for another partner or go it alone.

That's why business partnerships fail and how you can prevent them.

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