Six reasons partnerships fail

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By Enoth Mbeine

In the recent past, the media has been awash with stories of business partnerships that are collapsing.

A good example is a top city law firm, Muwema and Mugerwa Advocates, which has handled many of Uganda’s high-profile cases.

The firm dissolved a few weeks ago over what the senior partners referred to as “lack of trust”. We might never know the actual reasons for this, but we can attempt to analyse the common reasons why such businesses fail.

The idea of business partnerships is a great one. If the partners do their work properly, the strategic partnership allows one to be able to access new and lucrative markets, the partners are able to extend their capabilities and improve their businesses.

Partnerships can help one to strengthen their market position, improve business image and branding. However, these business partnerships are vulnerable. Getting out of a bad one is not a rosy experience. Some of the reasons for this meltdown include:

1. Communication breakdown

Some partners are not open and honest with their declarations, breeding mistrust. Communication breakdown affects the core of the business. For business partners to preserve the relationship, communication must be clear.

2. Controlling partners

Business partnership failure can also be attributed to too much control. Normally, the need to control is born out of insecurity and a lack of trust. This controlling behaviour is usually constrictive and ends up taking a toll on the other partner’s ability to function in a healthy, stress-free and creative manner.

3. Money conflicts

Perpetual conflicts over money are another source of failure. The actual damage to the business partnership is that usually each of the partners has different attitudes about money and, therefore, they tend to handle it in different ways. The types of money problems that are common among Ugandan partnership businesses include involving family in acquisitions and inequality in remuneration of the partners. It is important for partners to spell out how money will be shared when drafting the partnership agreement.

4. Competitiveness

Being competitive rather than complementary is another major source of business failure. Usually when partners are in competition with each other, they create disharmony in the business environment. Where there is competition, there cannot be openness. Competition in the business, breeds the emergence of camps where employees, directors and sometimes even the clients choose sides, which is a recipe for business failure.

5. Friendship

Like it or not, a business partner should not be your best friend. You need time apart. If you are with your partner every single day, you will get tired of hanging around him/her. It will help you improve the business because your partner will learn different things from his/her friends and so will you. You then combine the knowledge you have both gained and grow your business.

6. Change in vision

The change of vision by one business partners is another potential source of failure. For a partnership to flourish, the vision and mission must be reflected in all aspects of the business. Embedded in this are the core values and principles set by the business partners.

It is important to have clarity of the vision before entering the partnership and to revisit them periodically as they are bound to change with time.

However, not all hope is lost as it is possible to find a good business partner. Things will not be perfect when starting out, but give it a few years. As partners work through the issues that are bound to arise overtime, they will enjoy a happy partnership that will translate into business growth and success.

The writer is a senior consultant, Business Development Services


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Top city law firm dissolved over 'lack of trust'