367 Are Business Partnerships a Good Idea for Salon Owners?

I know that there are lots of salon owners who have a business partnership. Now, in most cases, it starts with two hairdressers who are usually good friends that were working together for someone else. And then one day they decided that together they should open a business of their own. And although they're both hairdressers, there's often an easily recognisable division of skills between them. Typically, it'll be something like they'll both work behind the chair seeing clients, but one of them will look after the financials and the admin side of the business, and the other will look after managing the team and perhaps the staff training. Now, on the surface, it usually looks like a great idea to people who have a lot in common. But between them, they also have a broad range of skills needed to run a business. But in the interest of saving money, there is usually no legal partnership agreement written up and that it's all just a handshake and a huge amount of trust that gets a business going. That's often where the problem starts. Now, look, occasionally it works out, but in most cases it'll last two, three, maybe five years. But eventually, for a range of reasons, it falls apart. And in many cases, there's a lot of financial loss and bad feeling involved. I'm Anthony Whittaker and welcome to this week's episode of the Grow My Salon business podcast. I've been involved with three different partnerships. They weren't all a disaster, far from it, but let's just say they worked out with varying degrees of success. Certainly didn't go the way that I'd imagined at the beginning. Either way, though, I'm a great believer that even when things don't work out the way you planned, at the very least, like everything in business, you will learn from it. And that's really important. So I reflect on my partnerships as all being a part of my business education. Now, partnerships definitely work in some businesses. For example, they're very common in legal firms, accountancy firms, architectural businesses, advertising agencies. And I'm sure there's other sectors that have a good reputation for partnerships becoming part of the business model. But in most small businesses, whether it's restaurants or fashion stores or builders or bakers, electricians, plumbers, hairdressers, et cetera, unfortunately, in most cases, they don't work out. They don't last. And probably the main reason that they don't work out is that they're often entered into based purely on trust and friendship, which sounds really good on the surface. And those things can be important in a partnership. But when the business goes wrong, when the partnership goes wrong, and let's face it, they often do. And then if there hasn't been a legal partnership agreement put in place, well, that's when it gets messy. There's an old saying that a business partnership is a little bit like a marriage, and I suppose it is. There's a lot of truth in that, because when you first go into a partnership, just like when you first go into a marriage, you don't go into it thinking about how it might end. In fact, it's usually the opposite. You usually go into it full of enthusiasm and optimism. And that's what