Why partnerships work

The success rate of businesses may depend on numerous factors in varying degrees of importance, but one key factor could be the ownership structure. When I looked for research on the success rate of sole proprietorship versus a partnership, I did not find credible evidence to prove that one is better than the other. Also, it may not be certain if the legal composition actually reflects real ownership. It is quite possible that a single owner may have paper-partners who wield very little influence on the business.

In this article, partnership refers to a real partnership where each partner has a credible stake, sufficient influence, and participation in the business.

To make a business successful, you need to make the partnership work. As a co-founder of the E-Movers Group that has a string of businesses, we work with multiple partners and I am glad to share a few learnings about why partnerships work:

Complimentary Skills

A business to run profitably may require different kinds of expertise and the partners should have one or more of these skills. Having all partners with similar skills is an overdose and a recipe for future conflict. Partners with established levels of skills can lend their expertise and at the same time steer away from ego clashes.


A study of failed partnership undoubtedly points to the failure of trust. The business may still be successful but the partners’ fallout when trust is lost. Many partnerships fail when trust is eroded by smaller acts of opportunism, greed, and dishonesty.

When starting out with a new business partner this is perhaps the most critical thing. When you come across an opportunity to partner someone, do not act in haste before establishing trust between each other. In bad times, what will hold the business together is the trust, and it is this trust that will take you out of the pit.

Students out of college form partnerships, people who find themselves sitting next to each other on a journey, start partnerships, and sometimes circumstances force you to be partners. In each of these situations taking stock of the trust level will save future failures.


A partner has to know everything that is happening in the business and anything in your personal life that can impact on the partnership. While each partner may be charged with specific responsibility, it is wise to keep each other totally aware. What is more important is to keep partners aware of your time-share and mind-share.

Having a partner find out something about your plans, interests, activities from external sources is a breach of trust if these things have an impact on the partnership and business. It is the lack of transparency that builds mistrust and eventually breaks the bond.


A key to a sustainable partnership is clear and constant communication. Partners must always keep direct communication channels open to allow ideas, perspectives, feedback, criticism, and grievances. A partnership can quickly go sour if members withhold themselves from expressing their minds.

Conflict Management

In cases where conflicts do occur, as they are bound to, then having an agreed resolution mechanism is necessary. Firstly, all must recognize that everyone will not think alike and when opinions diverge sharply, focus on agreeable points before dissecting the areas of dissent.

At times, allow others to have their say, even if there is not enough depth in the argument. You do not have to win all the battles as long as the war is moving in the right direction.

Greater Good

Alignment to the greater good of the company will provide a beacon to making decisions. All partners must stay steadfast to the agreed goals and must not let personal preferences supersede the company’s agenda. All actions must be justifiable keeping in mind what is good for the company.


All partners must have a sizeable contribution to the growth of the company in the context of their stake in the partnership. The contribution is a multiplier of time, effort, and mind. During the tenure of the partnership, each partner must ensure that they meet the expectations of the partners that were set when they came together.

As the business matures, it is possible that priorities change, but partners must review and reset the expectations from each other. When partners don’t pull the weight or escape responsibilities it diminishes goodwill and builds dislike. Other partners may not vocalize their dissent but it slowly boils the water leading to an uncontrollable spill.


And lastly, I believe that respect in each other’s merit keeps the relationship working smoothly. It doesn’t matter if partners vary in age, experience, clout or wealth, a partnership will thrive with mutual respect.

You need to build on strengths, support on weaknesses and motivate each other continuously to achieve the goals set.

I am sure that many successful partnership companies, as well as failed ones, will not find anything radically new in what I have to share, but then if we truly did believe and practiced it, we would be more successful and perhaps have fewer failures.

I hope to hear your comments on this, and also your views on why partnerships work.