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6 Red Flags Warning Your Business Partner Will Drag You Down When you're locked in a cycle of disagreements and distrust, it's time to go your separate ways.

By Matt Orlic Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.


You probably know the statistic: 80 percent of business partnerships ultimately fail. But people continue to enter partnership agreements because the benefits can give your company several advantages:

  • Combined skills and knowledge
  • More business capital
  • Greater borrowing capacity
  • Tax benefits

Despite all this, four out of five business partnerships still don't work out. If you want to make it as an entrepreneur, you've got to figure out how to make certain your partnership is part of the successful 20 percent.

To start, take a look at these signs that your business partner is more of a hindrance than a help. If any sound familiar, it might be time for an internal shake-up.

1. Benefits aren't equal.

Throughout my career, I've launched a number of different businesses in several different industries. I've worked with partners, and I've flown solo. If there's one thing I've learned, it's that business partnerships typically are most helpful if you each possess some skill or knowledge the other lacks.

Maybe one of you knows how to program, and the other is good at telling your story through marketing. Maybe you know sales, and your partner is a stickler for accounting and budget management.

On the other hand, if you work with someone who has significantly less experience than you -- or substantially more -- only one of you benefits. This can turn into a toxic business partnership. A healthy balance increases the chances you'll both benefit equally, whether that's in terms of professional development or company profits.

Related: 8 Critical Considerations for Choosing the Right Business Partner

2. Your values conflict.

You might think this matters only in a marriage, but you'd be shortchanging the importance of a shared vision. You and your business partner must work toward the same business goals and agree on how to achieve them. If you're incompatible in the way you approach finances, planning and strategy, it could create issues that affect your ability to succeed.

Former Walt Disney CEO Michael Eisner once said, "It is rare to find a business partner who is selfless. If you are lucky, it happens once in a lifetime."

You don't need your business partner to care more about your success than theirs. But it's much easier to make the relationship work for both of you if your ideals, values, goals and work ethic all are aligned.

Related: 6 Challenges Confronting Every Business Partnership

3. They're stuck in their ways.

In our digital age, businesses must act quickly to take advantage of new business tools and marketing channels that drive real growth. There's a reason "that's the way we've always done it" is one of the worst things to hear in a work setting.

Business landscapes constantly are changing. The most resilient entrepreneurs make it a priority to adapt to the landscape. You shouldn't continually have to convince your business partner that new skills and technologies can help your business flourish.

4. You don't trust each other to get things done.

It's an entrepreneur's job to wear a lot of different hats, but no one can be everywhere at once. A business partner provides an extra set of eyes and ears to help make sure business operations run smoothly.

But do you actually trust your business partner to manage your business? If you don't, the relationship is hurting you. That's all there is to it.

There can be many reasons behind this distrust. No matter the cause, it means you don't have a partner -- you have one more employee to manage. Find a way to trust your partner to do the job the way you believe it should be done or prepare to take on all the responsibilities yourself.

Related: Before Starting a Company With a Partner, Ask This Question

5. They offer problems but no solutions.

Retired business executive Jack Welch once said, "Good business leaders create a vision, articulate the vision, passionately own the vision and relentlessly drive it to completion."

Both members of a business partnership should be willing and able to create actionable plans to solve problems and reach business goals. If one partner spends all his or her time pointing out problems, it's a bad sign (not to mention seriously annoying).

A solutions-oriented partner can be a valuable asset in financial management, product design, marketing and other key aspects of your joint business.

6. You can't resolve certain conflicts.

Even the best business partners have disagreements (you should hear some of the arguments I've had with mine). Truthfully, these debates are another benefit of having two minds working on the same issues.

The trouble arises if those conflicts never come to successful resolutions. Intelligent people with different opinions should be able to weigh the pros and cons of each option and come to an ultimate conclusion.

If you simply can't resolve a serious disagreement, you'll have serious problems -- especially if the two of you have an equal partnership stake. Which person gets the final say?

Maybe you planned ahead and crafted your partnership agreement to include guidelines for such situations. At some point, ongoing irreconcilable differences are probably strong signs that your two heads aren't better than one.

Matt Orlic

Owner of Inspire Brands Group

Matt Orlic is the founder of Inspire Brands Group, which creates and develops brands worldwide by designing and manufacturing products in several industries, including consumer electronics, sports equipment, toys, sports apparel and more. His brands are distributed globally through mass retailers, and he also is engaged into licensing agreements with some of the worlds biggest brands, including Angry Birds, Liverpool FC, Manchester United and UMBRO.

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