Most people are not thinking about the possibility of failure when they enter into a business partnership. Rather, they are hoping that their partnership will bring new prosperity.
While you are unlikely to get far without that positivity, it is important to remove the emotion from the situation and see it for what it is. While you might do fantastically well, there is a good chance your partnership will fail.
Most partnerships do not last
While the rate of partnership failure is not entirely clear, some reports suggest it is as high as 70%. Even if it were only 50%, that would still be a significant figure. While that figure may sound surprisingly high, consider for a minute the friendships you have had over your life. How many of those remain intact?
Things do not need to go wrong for a partnership or relationship to end. Sometimes things just run their natural course. Maybe one of you wants to leave to pursue another project. Perhaps one of you wants out so they can retire early because the business has done so well. Or maybe the market has changed and there is no longer sufficient demand for your product or services.
A lot of partnerships do end due to problems, of course. Partners can fall out or lose trust in one another. Maybe the company loses a lawsuit that leaves it in financial ruin. Or perhaps the business never makes the money hoped and the funds dry up.
Acknowledging there is a good chance that your partnership won’t last is not negative, but sensible. It allows you to plan for that possibility and write a contract with clauses that cover how you would handle that situation. Doing this now can make the end of your partnership smoother if it does come.