A partnership venture starts out as a brilliant idea between at least two entities. The venture may be based on friendships that you are proposing to extend into a new business arrangement. You agree it's a good idea, you sign the agreement, get started and the partnership may work well for a while, until cracks start to show. The financial costs of not planning your partnership venture properly before you get to the agreement can easily get amplified by the costs of damage to friendships and loss of reputation. For some time now, I have been talking to people who've experienced failed partnership ventures. There were too many similarities and a few shocks. Based on these conversations with people who have experienced partnership failures, I have put together a list of 18 possible reasons why a stated 50% of partnerships fail within the first 2-3 years:

1. Too many chefs in the kitchen: When getting together partners gravitate to others with similar skills. Tradies with similar backgrounds working together are a good example. They may have different technical skills which formed the basis of their partnership, but what they possibly needed was a partner with business acumen. Bringing together technical skills for growing market presence may seem attractive, but there isn't enough diversity to value-add to existing skills and experience.

2. Different (and conflicting) values: In hindsight, conflicting values shows up as a contributing factor to partnership failure. A partner with a strong family values set will eventually come into conflict with a partner that puts the business first. Which is it to be - 80 hours a week workload to get the venture making lots of money, or a business structured around family time? These differences may not be touched upon at the start, but will quickly become a sticking point and possible deal breaker.

3. At least one partner is a control freak and treats others as staff: The need to control is a common trait of business owners. Most business owners have it. So why do they forget about this when they get together? At first, partners may try to compromise and make collegiate decisions. But for various reasons, at least one partner will break the silence and move front and centre. There are several ways they take control. They may feel they need to take control so that things get done. Their ego may lead them to showing their control in front of clients. If there isn't a clear delineation of roles and responsibilities, then partners may extend their control over the other partners and, in turn, confuse the staff.

4. Imbalance of effort: This is where one partner alleges to be putting in more time and energy than the other(s), which may be the case, agreed or not. Much of this is down to the perceived value of the partnership venture and the time and resources available. A good exploration of the value of the partnership, the return on investment, commitment and resource requirements at the start, will inform an agreement that clearly sets out to identify the effort required of each partner to make the venture work. Any conflict of these arrangements should also be dealt with via the terms of the agreement.

5. Partners are not being transparent, especially when it comes to the money: This is an all too common partnership breaker. One entrepreneur stated, after three acrimonious partnership failures, that his biggest learning was that "whoever controls the money, holds the power". Whilst this statement is open to debate, his viewpoint represents the partners who've been on the receiving end of lack of transparency from their colleagues. All too often, we hear about partners who syphon off funds and leave the remaining partner(s) with significant debts.

6. Partners bringing hidden debts to the partnership venture: You probably wouldn't think it were possible, but we came across two partnerships where partners had attempted to bring hidden debt to the arrangement. One was spotted before the arrangement could proceed. The other wasn't and the innocent partners found themselves left with the debt. We cannot be too careful when it comes to risk.

7 Hidden agendas: It's OK to enter into a partnership with an agenda. That's a benefit. However, things turn sour when it becomes evident later on, that there are other, less than altruistic, reasons for entering into the partnership venture. Be clear up front. Agendas discovered later on will inevitably lead to mistrust and partnership breakdown.

8. Lack of communication: When communication breaks down, at least there is some recourse to figure out what went wrong, but a lack of communication is a symptom of a lack of planning - who does what, reporting and accountability. Even with planning, a partner can take a lead role and not keep in regular communication with partners, staff and other stakeholders. Many instances of dissatisfaction and mistrust find their roots in lack of defining and following a good communication plan.

It's true op.. But I thank God my paternership business has not collapsed for two years now and I believe we would grow from strength to strength by His grace.