No doubt, more people want to go into a joint venture than go off to a business on their own. And who can really blame them? A joint venture gives you benefits that you will not get from having a single proprietorship business. With a joint venture, the risk is less, the work is less and of course, the number of ideas that you can come up with are doubled, tripled… depending on the number of partners that you have in the business.
But as most people who have gone to business with other people have realized, a joint venture is not all sweetness and light. It can turn into a nightmare if you do not take care it. Here are some of the downsides of getting into a joint venture and how to avoid or prevent it:
1. Slow management of business
Decision-making will be slower because the opinions of the other partners are needed before one can make a decision. This can slow down the operations and may result to lost opportunity. If all the opinions are not sought, discord among the partners can start.
How to solve: One can avoid this by making sure that one or two member of the company will be given the power of attorney to make decisions for the group. That way, the company can keep up with suppliers and the operations. Only the big decisions that can affect the company long term will be consulted with each partner.
2. Too many ideas, no agreement
Although it is good to have more than one thinking heads, it can also be a problem when no agreements are reached. Just imagine having a lot of ideas on the table but nothing concrete to work on. Too many people who want to get their voices heard can create problems within the company.
How to solve: The best thing to do about this is to devise a system wherein partners will have limit on the number of ideas that they will come up with and to have a deadline for narrowing down the ideas into something that everyone can work on and deal with.
3. Inequality with the brunt of work
Knowing that there are partners who can take over for them, some people slack off and do not do the job. They pass their responsibilities to their partners and just give a variety of excuse. Also, in any kind of group, there will be people who will be doing most of the work while others will just be sitting on the sidelines. It’s natural for a group to have inequality of workload even when there is a clear division of labor.
How to solve: To make sure that at the very least you will have more or less the same workload, you need to define the job of each one and to make it clear from the start that slacking off is not to be tolerated and if they don’t take care of their end of the business, they can lose some percentage in the final profit sharing.