10 KEYS to a TERRIBLE Business Partnership [GUARANTEED!]

Summary

• Avoid partnering with someone with the same knowledge base: If your potential partner knows the exact same stuff as you, one of you is unnecessary, meaning there's no incremental benefit to the partnership.
• Ensure there's a misalignment of time: If both partners have the same amount of available time, make sure that other aspects like knowledge or money aren't aligning either, so that the partnership becomes unbalanced and potentially contentious.
• Be cautious with money in partnerships: If neither partner brings additional money to the table, it doesn't add value to the relationship, which can make for a poor partnership.
• Have differing expectations and no formal agreements: To cause conflict, different expectations without documented agreements or communication of roles and responsibilities are a recipe for disaster.
• Give away too much too early: By giving away everything in the partnership and possibly doing a disproportionate amount of work, you can breed resentment that may lead to a renegotiation or breakdown of the partnership.
• Have misaligned mission, values, and vision: If you and your partner do not agree on where the business is going, how you will get there, and what is important to you both, it will create strife and conflict.
• Be wary of lifestyle mismatches: If your partner's personal life is chaotic and not in line with your lifestyle, it is likely to affect the stability and reliability of your business.
• Aim for complementary skills and aligned missions: Partners should bring skills or resources (knowledge, money, time) that the other doesn't have to add real value to the business.
• Document and agree on expectations: Clear and equitable expectations that are well understood and documented can prevent misunderstandings and disputes, making for a stronger partnership.
• Ensure similar interests and lifestyles: To make a partnership work, both parties should share similar interests and lifestyles, avoiding the complications that come with significant lifestyle differences.
• Plan for the long-term when considering partnerships: Think about how the partnership will function 10 years down the line, and make sure the equity is given to those who will truly drive growth.
• Decisions should be made collectively with less conflict: If both partners would make the same decision when presented with the same data, it's a good indicator that there will be fewer conflicts over time.

Video

How To Take Action

I would suggest to avoid partnering with someone who knows the same things as you. Instead, find someone who has different skills or resources like knowledge, money, or time. This way, you both bring something valuable to the table.

A good way of doing this is by planning your time differently. If you both have lots of free time, look at other areas like money or knowledge where you can complement each other. Don't team up with someone who can't bring something different to the table.

Be cautious with money in partnerships. Don't just partner with someone because they have money or because you do. Money alone doesn't make a good partnership.

Make sure you and your partner have clear expectations. Talk about your roles and write down what you agree to. This prevents misunderstandings later.

Don't give away too much too early. Share things equally and work fair. If you do too much, you might feel bad later, and the same goes for your partner.

Have the same mission, values, and vision. Talk about where you want the business to go, how you'll get there, and what's important to you both. If you don't agree, you'll just argue.

Check your lifestyles too. If your partner's personal life is messy, it might hurt the business. Make sure you are both stable and reliable before you start working together.

Plan for the long-term with partnerships. Think about how you and your partner will help the business grow over the next ten years.

Make decisions together. If you and your partner usually agree when you see the same things, you'll probably work well together without fighting.

Remember, partnerships are like marriages in business. Find someone with skills you don't have, who shares your big goals, and who you'd be proud to introduce to others. If you do this, you can build a great partnership.

Quotes

"Charlie Munger talked about inverted thinking as one of the best ways to solve problems"

– Alex Hormozi

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"One of you being unnecessary to begin with which means both of you are giving away half your equity for no incremental benefit"

– Alex Hormozi

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"If you can't have a hard conversation with a partner before even doing business…you're not gonna have a good conversation at the end"

– Alex Hormozi

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"Purpose of the contract is that we have clear expectation that is why contracts exist clear expectations on agreements"

– Alex Hormozi

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"Equity is the most expensive thing that you give up in a relationship"

– Alex Hormozi