Friends To Foes: Why Teaming Up With A Partner Is A Bad Idea

 

On the face of it, merging with another business can seem beneficial. For one thing, their resources become yours, and vice versa. Plus, the bills and expenses will be split two ways, which is a great cost cutting tactic. Still, there is no need to dive in head first before studying all of the details. Yes, these are areas where a partnership is advantageous, and it can work out in everyone’s favour if done properly. However, there are also obstacles that can get in the way and destroy any chance of success.

Here’s why teaming up with a partner isn’t always a good option.

Complicated Legal Process

Any two businesses that jump into bed together without combing through the fine detail are stupid. Deciding to join forces is one thing, but making it official is another thing completely. Why? It’s because everything needs to be codified and signed off by both parties. Otherwise, there’s a good chance that you’ll be in a vulnerable legal position further down the line. Even if you have a lawyer to shoulder the responsibility, the stress and hassle are still unbelievable. After all, everyone wants the best deal, and no one has enough trust to come to a compromise.

Expensive

The direct result of the legal process is the extra cost which the company will accrue. As soon as you hire a lawyer, the company has to fork out for the legal bills. Plus, there may be a need to keep them on retainer for the future. And, it isn’t only the legal bills that add to the cost. There is bound to be an influx in the workforce because both firms will have employees they want to keep. And, your funds may be liable, which means the new company has access to the money. All in all, a merger can cost more and save no money whatsoever.

Get On Each Other’s Nerves

Let’s be frank from the outset. Businesses that enter into a partnership should look for offices to rent or buy instead of keeping one premise and selling the other. The reasoning is simple: it saves a lot of time on arguments. Moving in together is a tricky procedure as it can make people feel uncomfortable, and that leads to resentment. Then, there is the fact that a small working space will increase tensions in the office. Sure, a new office is a perfect solution, but it may not be on the cards in the beginning. If you have to wait to move, the relationship could be in jeopardy during those few difficult months.

 

Ruins Friendship

Some people say there are no such things as friends in business. Well, there isn’t when two bosses collide. Whether you’re the best of mates doesn’t matter because a disagreement is on the cards. If you’re lucky, it may not be anything cataclysmic. However, there is a chance that it could drive a wedge in between your friendship. Not only can this jeopardise the merger, but it can also affect your relationship outside of work.

And, the industry is a lonely place to be without any friends to watch your back.

 

Michael Foote

Michael Foote, founder of Quote Goat, has over 13 years experience working in the finance, insurance and currency sectors, gaining a financial qualification in 2010-2011. LinkedIn Profile

Friends To Foes: Why Teaming Up With A Partner Is A Bad Idea

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