Business partnership has a lasting impact on how and where a business will grow. It takes clarity and communication to make it work. All parties understanding their responsibilities, fulfilling the expectations of the mutually agreed-upon objectives for growing the business. Establishing processes to maximize each other’s strengths, focusing on commonalities in values, and shared visions for business outcomes creates a foundation of trust from which to grow.
Figuring out how to bring unique individuals together in a successful business partnership is the goal. Because when things are going well, there’s an almost indescribable energy. And when things are going well between you, it carries throughout your organization and all relationships. Together you create better. You communicate better. You work better. You play better. You just do it all better.
– Jan Hoistad
This article takes a look at coaching for business partners and breaks down 4 times when you need the expertise of an experienced Business Relationships Coach whether you’ve been in business for a while or just starting a new business.
If you’re looking for guidance on improving your relationships in the business world, you’ll find lots of information on developing sales and management or leadership styles. Some resources focus on aspects such as presence, empathy, confidence, and listening skills. Information on how these relational qualities are developed is rare.
If you are specifically seeking information on business partner relationships or coaching for business partners, and you do your research, you’ll immediately pull up a long list of resources regarding the financial and tax ramifications of business partnerships, but little on the relationship requirements. Some articles do skim the surface of choosing someone whose values and lifestyle are compatible, and someone whose talents, tenacity, and integrity complement your own.
But history and conversations to suss out such compatibility and complementary aspects are just the beginning of a working partnership. It’s what happens after the honeymoon that really matters, and there is relatively little information on HOW to develop the relationship and communication skills within such an important professional relationship. Business partnerships (legally binding or not, friendship or marriage based or not) are much more complex than a lens on the dollar outcomes or surface compatibility would have you think. That’s where coaching for business partners comes in.
Executive or Owner Coaching ensures your business partnership will develop and remain successful over time.
HOW To Make a Business Partnership Work
The good news is that relational and communication skills that make partnerships successful can be acquired and developed. And just like in personal relationships the focal point is awareness and practice.
Because they are skills, they are coach-able, teachable, trainable. If you find the right guidance you can build together. The right guidance plus implementation—putting the tools to work and practicing—can bring about behavioral, emotional, and interpersonal changes in professional relationships.
Because relationships are relationships, such practice naturally generalizes to all your relationships, both professional and also personal.
When you implement consistently, business and life may still be challenging, however, when you and your business partner are working with the same mindset, tools, and skills, navigating difficulties is smoother, decision-making focuses on win/win solutions to your mutual end goals, and you avoid the energy drain that strife brings to so many relationships, you focus is on the enjoyment in your work and life.
One Business Partner Case Example
I had a business owner tell me he spent 4 hours searching for an expert to help him and his business partner work through some difficult issues that were tearing their hair out and tearing everyone in their multi-million-dollar, small-sized company apart. Tom and Ed had resorted to blaming and shaming. Angry, lengthy outbursts and shutdowns ensued. What started out in 1917 as a hopeful 50-50% partnership had rapidly deteriorated. They were stuck and didn’t know what to do.
Having been through couple’s therapy and counseling in the past, aware of coaching and business consulting, Ed went online to search every variation of words and phrases to find the right help, including concepts of anger and fighting in relationships to therapy, couples therapy, life coaching, leadership coaching, business owners, business coaching and many permutations in between. The list went on and on. Exhausted, he almost gave up.
Then he found my executive coaching and business consulting services, where a major focus of my work is with entrepreneurs, business owners, business partners. Through our work together, individually, as partners, and as a team, Ed and Tom, and their entire group have had greater success in working compatibly and more efficiently together ever since.
As business owners, Tom and Ed needed to work out the huge chasm that had opened between them. Development of their communication and mutual leadership skills came first. We all would admit it was tough going at first. Focusing on what they value, where they do come together, and most importantly, on the long-term growth they both desire, brought them back together—not in the former unconscious way—but in a new way.
This has been especially important for these business partners since each of them has family members working in their company. They go out to their customers, but each works from home, staying connected remotely for many days. It’s not quite a family run business, however, it’s a business of two families and expanding their number of employees and contracted salespeople. So you can see that when the business partners have discord, it’s easy for it to trickle down the company and seep into family life.
Coaching focuses business partners on values and outcomes to create alignment. Pairing this with relationship skills leads to the success they both desire.
Focus On Outcomes Brings Alignment and Successful Outcomes
Individually and together, I coach and teach, observe and offer feedback. These are typically alternative ways of interacting and responding as they work together and with their team. Both owners have become increasingly aware of their unique styles and do not dismiss or demean one another as often, now finding value in their differences. They show more appreciation for one another and take things less personally. While they sometimes run into potholes, focusing on the business needs and planning for growth brings them more quickly back on track.
Through regularly scheduled business owner meetings in which they take time to listen and to plan together, Ed and Tom have successfully begun separating their skill and management lanes while also practicing coming together around joint decision-making where it’s needed as joint owners. As a result, they’ve become more objective, are able to connect and enjoy one another more, and are looking to expand and grow their company in the coming years.
With the increased growth of projects and staff, Ed and Tom are focused on learning to let go, to delegate to the competent people on their team. This is what every CEO needs to do if they are going to grow. Because of this emphasis, everyone in the company is developing new skills, taking on increased responsibility, and stepping up to the challenge all because these two business partners obviously value growth for themselves and everyone around them.
When we came to Jan, our company was financially strong…but we were new business partners. Our different management styles negatively affected our employees, sowing distrust among the ranks. We had a very difficult time working together running the business. In front of the customers, we were great. In front of our employees was another thing altogether.
We reached out to Jan in an attempt to fix what was broken. She’s worked diligently with us to learn to trust each other, embrace each other’s style of management, and realize that we both had the best interest of the company at heart. Jan showed us how the business needs both our ways of thinking and will thrive if we allow each other’s strength to shine.
Executive coaching for business owners can prevent and repair difficulties in your business partner relationship
Preventing or Repairing Difficulties in Your Business Partner Relationship
Since many businesses are started, and many fail, it’s important to be thoughtful if and when you choose to become legal business partners.
In an article entitled Top 6 Reasons New Businesses Fail the author points out the odds we’ve all heard:
“The SBA states that only 30% of new businesses fail during the first two years of being open, 50% during the first five years and 66% during the first 10. The SBA goes on to state that only 25% make it to 15 years or more.”
Most will tell you this running-a-business-thing—in spite of the social media photos showing people sailing, skydiving, or walking on the beach while the business runs itself—is more demanding than they ever dreamed. And taking on a business partner can be a very good choice if handled well. It can also derail both professional and personal life if safeguards are not built in from the start. Safeguards being mindset, skills, and tools in relating, as well as making decisions together. Data shows that having an expert coach/consultant on your team is beneficial in many ways.
So, the best advice is to work with a business coach who is also skilled in relationships, especially business partnerships.
That said, here are 4 times you should consider working with a business partner relationship expert, skilled in both the relationship and business needs.
- Prevention: Before You Sign the Legal Agreement
I bet you’re not surprised I started off with this! All would nod that prevention is the best medicine, but when it comes down to it, not many actually seek guidance, coaching, or expert counsel when entering into a relationship that looks good at the moment. Or, I see and hear about many situations where the well-intentioned business owners simply don’t know all the best questions to ask or what to discuss more deeply than the legalities or the tax ramifications. Typically they focus on the business agendas and not the relationship factors. Facing the challenges of taking on a business partner, while it takes a little time, is well worth it in the long-run.
I’ve also seen many business attorneys and CPAs tell clients that a partnership is a potentially difficult relationship to enter into. That it’s like a marriage at its best and worst. Taking this further to ensure their client has a deeper understanding is not in their wheelhouse, though all assume it’s been addressed.
Asking questions and having discussions about how you are going to handle things that come up as differences, disagreements, or conflict are key here. Having relationship guidance through these aspects—as they will impact the business outcomes desired—is key to a healthy, long-term commitment.
Understanding 1) the nuances of different relationship styles and arming yourselves with 2) the tools and skills of a clear partnering approach can save you time, dollars, and even heartache as the business grows.
- Repairing Problems Between You and Your Business Partner
The business owners, Tom and Ed, introduced at the beginning of this article, had very different skill and personality sets. They worked together many years at another company, had become friendly, and knew each other’s capabilities. While they worked together, they didn’t run their former company, nor did they have to make decisions together. They worked for someone else and as they each became dissatisfied in that company, they sought one another out, and leaving together made it exciting, financially feasible, and possible.
They sought legal counsel and were advised to make a 50% – 50% business partner agreement, which they might have somewhat impulsively signed.
The relationship soured midway through the first year of co-ownership. In retrospect, while they threatened “divorce” many times before and during the initial stages of our work together, this 50% – 50% agreement may have saved their relationship and the company. Other business owners may have dissolved the business partnership altogether. Instead, these owners sought help first for their relationship. I’m sure, in the long-run, it will ultimately save profits—although profits delayed during the year-of-gnashing-teeth before and when we began to work together.
Like most entrepreneurs, business owners tend to have a strong set of characteristics—great for visionary business growth—not always easy on relationships. Those with entrepreneurial tendencies are inclined to be dogged, controlling, even stubborn in achieving their vision. I often hear them say about employees that “It’s sink or swim.”
When these characteristics butt heads, it impacts employees on down throughout an organization. The business partners highlighted in this article each have teenagers at home and readily agreed they were being “dysfunctional parents” at work. While they do not use an EOS approach, they did need to find a mutually agreed-upon system that works for them. They needed guidance to find new ways to come together.
Pairing this personality/business temperament with someone just like you, or very different than you will often lead to difficulties that arise in 1) communicating around differences and conflict, and 2) arriving at mutual decisions and accountability. It’s simple: When you agree you get along great! When you don’t, it can be hell to pay.
Often these style and communication issues are workable with the right mindset, tools, and skills. That is where a coach, highly skilled in relationships, business partnership coaching, with an understanding of the business itself can move you forward faster.
- Dissolving a Business Partnership with Coaching Help
Similar to personal relationships, there are times to call it quits in a professional relationship. Whether viewed as a positive or a negative reason, in either case, dissolving a relationship in a healthy way is always best for the parties in the long-run.
Some reasons business partnerships may dissolve:
- If you uncover different values.
- If one or both of you desire a different life, career, or business direction.
- If your communications are not repairable, especially after getting assistance.
- If there are major financial reasons making the business not viable for growth or sale.
Consciously understanding 1) “Why” you are dissolving and 2) “How” you are going to handle the transition for yourself and others will help you both to move forward with less angst and energy drain. Well known couples therapist works with 2 male business partners discussing their break-up in one of her How’s Work podcast episodes. In one hour they get to the underlying dynamics that both brought them together but could allow them to dissolve the business aspect of their long-term friendship.
While such depth is not always achieved in a business partner dissolution, just like in a divorce, there are many ties that sometimes bind—finances, employee relationships, sometimes family or social connections—that make it important to have closure, discuss, and agree on how you’d like to handle those things going forward. Especially if you choose to preserve a friendship.
And, since it is always advised not to burn your bridges in any case, agreeing on how you will characterize the split will be important for public perception and the ability for each of you and your employees and families to move forward. A good business partner coach can be helpful at a time like this.
Executive coaching and business consulting help prepare business partners for eventual sale or exit.
- When You are Ready to Grow with a Long-term Exit in Mind
While best advice says to start a business with the end in mind, the majority of business owners may have a vague idea that is often not spelled out until there is a wake-up call—be it a crisis, arriving at a specific age, or maybe outside pressure from the industry or family.
When there are two or more partners, having conversations guided by an objective, outside expert can make for more robust and often more open conversations. With skills in both relationships working for win/wins together and life stages of your business, that coach or consultant is at the ready to help you assess where you want to grow to, what the gaps in the business are that need to be filled or solidified for a future exit. They’ll also be sensitive to family succession, employee futures, and family dynamics and desires that need to be taken into account in preparing for your next phase or phases of growth and then succession or sale, then exit.
As a business coach working with many business owners beginning to anticipate succession or sale of their businesses, I rely on The State of Owner Readiness research on business owner exit needs, conducted around the country by the Exit Planning Institute. With my own extensive background as a psychologist/coach with Certification in Exit Planning, I know that a skilled business partner coach will also prepare you for life after business, which the majority of entrepreneurs have a difficult time including in their future planning.
So whether you are 1) strategically planning for growth, or 2) you are stable but need to plan for your exit, wise business partners, like Tom and Ed, seek help early on, from a business partner coach, so they consciously integrate the business, its people, and each partner’s personal and professional needs and action steps in a long-term plan. Skilled in partnering and team relationships, ideally this coach/consultant would potentially quarterback the larger team of advisors, including attorneys, financial advisors, mergers and acquisitions planners, and other specialties needed for both growth and exit.
As the business grows and evolves, so should your partnership. It’s all too easy to focus on the work, the clients, and the nuts and bolts of the business. But business partnerships require attention—at each stage— to ensure success and outcomes. Deciding if you should partner and how are critical Choice Points. Then strategically coming together, implementing, and regularly pausing to re-evaluate and re-vision together drives success.
Having a business coach for entrepreneurs, a business transformation consultant, who knows your business partner needs—someone who can help you stay out of the typical pitfalls—can help you breathe more easily. When we work together to clarify values, share visions, plan strategically and implement consistently, you achieve your goals and successfully build your business together.
Responsibilities may change, work-styles may start to differ, and communication between you or with a growing company of employees may sometimes be a challenge. When we strategically approach each Choice Point you acquire the skills and put the right processes in place to weather these changes. Choice Point strategies help you to grow in a mutual direction as partners.
When a partnership has sound processes and feels fulfilling, you could very well be in business together for years. Anticipating and developing strategies in light of offers of buy-out or merger become important. The same can be said for growth and transitions in staff and leadership. Integrating next generations and moving to the next stages goes more smoothly with established exit strategies and succession plans.
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