Lack of reliable contracts keeps off potential investors

Some have been fantastic, and still are. Some just never really happened, although the concept was brilliant, and we all remain poised for ‘one day’.

I have interviewed and met many an entrepreneur who has waded through the difficulties of a spoiled business partnership.

Typical was the restaurant owner, who had never run a restaurant but went into partnership with a long-time buddy who was already running a food joint that he was selling.

Only he never sold it, and the whole joint management notion never went to plan, in time put in, in money put in, or in any way.

Indeed, of all the stories that have been recounted to me of partnerships that have collapsed, the ‘didn’t go as planned’ is the biggest hurdle.

Yet, this is not the hardest kind of break-up, and often doesn’t turn into a break-up at all.

In my own business, one of our now longest partnerships saw both sides reassess after the first 15 months on the basis of what we had actually put in, and adjust accordingly.

In this, spreadsheets help, although they can be far from perfect when measuring management input that was never paid, but must now be costed.

However, there is another other type of contract that can go bad too, where remedy is most surely out of reach.

Often in our partnerships, we invest jointly, we both put in to the creation of something together. It is a joint endeavour, and it truly is.

As one friend put it to me this weekend, in those kinds of partnerships, the joint investment bonds are oh-so-tight when the going is tough, but when the product succeeds, there is a remarkably prevalent pattern in contractles

Kenya for the bigger partner to decide it wants it all.

It’s a norm: a ‘this is Kenya’ moment. And a moment that none of us need to live through.

The key, most surely, is not to enter contracts where it matters if it gets torn up.

Just don’t invest your business in a project critical to your whole future that depends on a contract being honoured.