Your Business Partnership: Prepare For Better And Worse

Start-up Ventures Need Preparation for All Possibilities

Starting a business is exciting. But even though you’re eager to get the doors open and make that first sale, taking the time now to start off smartly will do more to ensure your success than nearly anything else you do -- especially if you’re entering into a business partnership.

Unclear expectations cause the downfall of many partnerships. It’s great if you like and respect one another, but it takes more than friendship to manage and lead a business.

Make sure you know your prospective partner’s values, priorities and goals -- both personal and for the business. Work together on a specific project. Or interview each other to discuss “what if …” questions and see how you like each others answers.

If you’re planning a business partnership with relatives, be extra careful. You don’t want to end up straining or damaging family relationships.

Get It In Writing

A business partnership is much like a marriage, and a well-considered “prenuptial” agreement will help smooth your future together. Your partnership agreement should define:

Ownership: Who is investing what resources and how each partner will recoup that investment, including compensation.
Roles and responsibilities: You’ll need compatible working styles and complimentary talents, skills and experience.
Exit strategy: Agree now on what will constitute “the end,” but also identify what will happen if your lives or your goals change.

Plan to be flexible, but don’t mistake vagueness for flexibility.

Create A Communications Plan

You must be entirely comfortable openly discussing how you’ll begin and run your business. Decide in advance how you’ll handle day-to-day communication as well as regularly scheduled status and planning meetings.

Like life itself, change happens -- and sometimes things don’t go the way you want or expect. You simply can’t predict the future. So consult an attorney and contact us here or give us a call to ensure you’re asking the right questions and not overlooking important details. We’ll give you impartial, knowledgeable advice.

By planning for better or worse, right from the start, you can ensure your business partnership is harmonious and profitable for everyone concerned.