For every great real estate business partnership, there is another that ended tragically. Fortunately for those just getting started, it isn’t difficult to understand why these failed partnerships did not succeed.
People often jump into a real estate business partnership for all the wrong reasons. Perhaps they had a business that became too successful too fast and therefore needed to acquire a partner in order to distribute the heavy workload. While this scenario isn’t necessarily a bad one to be involved in, taking on a partner out of ‘need’ versus a well-thought-out ‘want’ can lead to disaster. Carrying out the proper due diligence is essential when selecting a strategic real estate business partner.
Business partnerships can also backfire when one person forces the transition from friendship to coworker. Although starting a business with a good friend can lead to success, it can sometimes have the opposite effect. Just because you are great friends with an individual does not mean he or she will make the perfect partner. Business partners inevitably spend an enormous amount of time together, which can lead to frustration and miscommunication between people if they are not each ready for the commitment. The last thing anyone wants is for a failed business to result in a failed friendship. If you believe that you and your best friend will form an ideal real estate business partnership, just be sure that your values, goals, expectations, and notions about the future align.
Starting a business will be challenging, time consuming, and overwhelming, and while a business partner can help to alleviate some of that stress, the wrong partner can just as easily be the cause of that stress. If you are not sure you and your business are ready to take on a full-time business partner, it is a good idea to start small. Meet with a variety of prospective candidates for a casual conversation to see how well the two of you get along and work together. You might even want to consider working on a small project with each potential partner to determine whether or not he or she will meet the needs of your company.
Regardless of if you end up with the perfect real estate business partner or not, it is likely that you will face a number of obstacles – that is just the way the business goes. However, if you do run into a challenge, there are always ways to overcome even the worst hardships.
Overcoming The Challenges Of A Real Estate Business Partnership
Even the Ben and Jerry partnerships of the world run into hurdles. Your business might be booming, while the partnership side of things is facing tribulations. If you and your real estate business partner are confronting any of these three common challenges, I’ve got good news: they are not terribly difficult to conquer:
- Differing Leadership Styles And Personality Traits. Everyone will have their own way of dealing with a problem or coping with a negative situation. This is okay, as long as you don’t let it detriment your business. In fact, it can be beneficial if both partners have differing management styles, especially if each person is playing to their strengths. The way to solve the issue of opposing leadership styles is to get everything down on paper. Outlining the specific details of each person’s role will help to mitigate problems down the line. In this case, one person might choose to be the disciplinarian, task-oriented boss who known for laying down the law, while the other partner pursues a more Laissez Faire approach. This supervisor is there to keep employees happy, ensure that company morale is on course, and to make certain that everyone maintains a positive attitude. These conflicting outlooks can backfire if not determined before the real estate business partnership ensues. No partner wants to feel taken advantage of or like they are doing more work than the other person. If you don’t want differing leadership styles to cause a riff in your partnership – and friendship – is important to verbalize your personal techniques before changing the course of your business. Putting something in writing will help to ensure that both partners are doing their jobs correctly.
- Contrasting Expectations And Degree Of Commitment. Before acquiring a real estate business partner, it is necessary to make sure that your goals, values, and visions for the future of your company are parallel. The last thing you want is to sign a real estate business partnership agreement only to realize that the collaboration is doomed for failure. One of the biggest reasons business partnerships fail is due to a lack of communication regarding mutual expectations and commitment levels. If your reason for taking on a business partner is to unlock your business’s potential while giving it the edge it deserves, you need a partner who is fully on board. Why are you in this business? Is it to make money? Is it to change people’s life? Or is it to expand your business resume? You need to first answer this question for yourself and then find a partner who’s answer is the same. If you’re goal in life is to run a successful business and you have a partner who is simply there for the experience – but not ready to dedicate everything to help ensure that success – it is most likely that, that partnership will fall through. If you want to avoid this fiasco, it is important to ask your prospective candidates the right questions. Look into their past business ventures to see how long they remained an integral part of each one. Ask about their strengths and weaknesses to determine if they will be able to pick up the slack in areas where you lack a particular set of skills. Inquire whether or not there is anything currently occurring in their life that might make your business their secondary interest. The best way to avoid this obstacle is by setting boundaries before jumping into the deep end of your business.
- Gap In Skill Levels And Roles. Another problem that real estate business partnerships face is a gap in skill levels. As an entrepreneur, you obviously want to acquire a business partner whose experience matches or exceeds your own. However, it is sometimes impossible to determine if this will be the case before truly working with someone. To help alleviate this confusion, you should ask a potential partner to consider working with you for a set amount of time as a trial. Here, you will be able to notice whether or not his or her skill level is appropriate for your business. It can be hard to find the perfect business partner, especially if you are just starting you business, because it is rare that an established professional will be ready to up and quit his or her day job to join a venture that has yet to turn into an up and running reality. Ultimately, this will be a learning experience for both you and your potential partner. You want a person with a skill set that is in harmony with your own, but it is likely you will have to show that person exactly how you want things done. If you are clear about your needs from the beginning, your partner will have room to grow; and when cultivated correctly, your business will flourish into a well-oiled machine.
Don’t let starting a new business scare you out of pursuing your dreams. Consider establishing a real estate business partnership to propel your business forward.