At some point, your business may grow beyond a sole proprietorship. You may no longer be able to take on the full workload and responsibilities of your commercial activities. At this point, you may opt to enlist the assistance of a business partner.
Your business partner will help to ensure that your venture continues to perform to your desired levels. Often, business partnerships work out, with no more than standard disagreements occurring. Unfortunately, there are occasions where business partnerships fall through.
The collapse of a business partnership can lead to lengthy disputes as well as costly litigation. However, if you are able to spot the warning signs that a partnership is not working out, you can exercise damage control. Outlined below are some common signs that a business partnership is not going to work out.
A breakdown in communication
Communication is key to any successful business partnership. You may notice that your partner has become short-tempered with you when addressing issues together. Furthermore, you may catch them in a blatant lie.
At times, communication problems can be more subtle. For instance, it may take your associate a long time to respond to your requests. Communication issues can also extend to your customers, meaning that they are not getting the attention they expect. Maintaining effective lines of communication across the board is fundamental to the profitability of your company.
Poor financial decisions
While you may have carried out due diligence before enlisting your partner, it is not always possible to spot every cause for concern early on. Only later might it become evident that your partner has poor decision-making skills. When these poor decisions revolve around the financial aspects of your business, the results can be devastating. Poor financial decisions can not only impact your cash flow, but they may also lead to costly litigation.
If your business partnership is not working out, it is important not to panic. With the appropriate legal knowledge behind you, there are ways that you can protect your interests.