Five reasons you have to be aware of
Business partners are usually highly beneficial for everyone involved – be It in UAE or any other country. Companies can share costs, face risks together and hire the best professionals in the area. No wonder, it is one of the most popular ways to do business in Dubai and other business cities of the globe. However, in the long run, some of these benefits can turn into flaws. About 70% of business partnerships result problems and fail. Why? This is exactly the question we are going to look into in this article.
Business partnership with family members of friends is a potential flop
True, some businesses of this kind are successful, and the idea of starting a business with someone familiar can sound very tempting, especially under the consideration of the historically strong friendship and family ties in the UAE. But the choice of a business partner requires the use of completely different mechanisms – it has nothing in common with the choice of a future wife or a friend.
Successful business partnerships rely on the perfect combination of strengths, personality traits and experiences – in a way people have to complement each other.
It might sound discouraging, but a successful relationship is not sufficient for further business cooperation. Business partnerships require discussions that can sometimes be tough – you’ll have to brainstorm, take responsibility, find solutions, set goals – it might not work if you are involved in personal relationships. And here is some disappointing statistics – in half of the cases, business partnerships between family members may disintegrate the family. As a result, families can experience problems and even fall apart. The same might happen to friendships.
It is essential to have a full partnership agreement to avoid these difficulties. This way finance, rights, obligations, potential problems and responsibilities are discussed and fixed in advance which is highly vital. A simple handshake can hardly set things going. It may work at the beginning, but at some point of time may result hefty debates.
We obviously do not try to convince you that any business partnership with family members or friends may ruin your relationship with the loved ones. However, you have to be aware of the fact that this is quite often the case.
Success comes with time – applies in all places including Dubai, UAE
In business, there is no certainty of success. Cautious and strategic planning of a business implies thorough research of the target market, a realistic forecast of cash flow, analysis of the availability of sufficient financing, the study of a business’s perspectives and other factors.
However, even with all this done, there is no guarantee that your enterprise in UAE or another country will become successful.
You need patience and persistence to get things going as well as your personal long-term commitment. Be ready for slow growth and fluctuations in income.
Unfortunately, if you are not prepared for these happenings, it can cause serious psychological harm and problems and result conflicts. This is especially true if one of the partners has previously been an employee with a fixed salary. Being an entrepreneur in Dubai is risky – as in any other place – and you have to be aware of it. Business takes the time to grow and thrive – this is another thing to keep in mind.
Partners can be unevenly committed
As we have already mentioned above, most of the things have to be discussed beforehand in a partnership. However, there are certain things that can hardly be measured. How do you estimate the effort? The dedication of a person? Your partner’s passion and devotion? Yes, the inequality regarding commitment can cause serious conflicts among partners. And any business in UAE requires a huge commitment, both regarding money and personal dedication. You are in charge, and you are individually responsible for all successes and flops. If you feel that the sacrifices made by your partner are less considerable, this can lead to disappointment and discontent.
Why does one partner might feel more devoted to the business than the other one? The less enthusiastic one might have a family to take care of; another business that distracts him or his ultimate ambitions are not related to this area of entrepreneurship. The uneven contribution of partners can be troublesome. That is why it has to be understood in advance and discussed and outlined in the Partnership Agreement.
Collisions of characters
We are all different people, and an important quality of any grown-up person is to be able to respect the diversity. You don’t have to be similar concerning every issue that arises. Moreover, a difference of opinions can give an impulse to a different vision, creativity and unique character of your brand.
Thus, please, view this as your advantage. Your way of thinking, as well as your characters, don’t have to be identical – let them complement each other, and you’ll find yourself in a win-win situation.
Difference in values
Right, you might be different, and the unique vision of each of you will contribute to the achievement of long-term goals of your UAE business partnership. But there are some things that require unity. Each of the partners has to be equally passionate about the business you are working on. If, as an example, one of the partners believes in expansion and opening of international offices and the other one regards entrepreneurship as a kind of a buffer, means to have a fixed income or as an escape from a job he used to do before – it is not going to work.
Again, such things have to be discussed and agreed in advance. You have to look in the same direction – otherwise, your business partnership is under serious risks.
What you need to do for your partnership in Dubai not to fail
Do your research before joining the partnership. Think of perspectives, study your potential partners in advance and most importantly – elaborate a comprehensive greatly detailed and written Partnership Agreement. Try to predict all possible obstacles you might face. A detailed agreement for your partnership in the UAE will improve your chances to succeed and guarantee that some of the above-mentioned difficulties won’t even arise. Business area proper research and comprehensive partnership contract, as well as clear and systematic approach to the business, are the must to achieve success – be it in Dubai or other city of the globe.