5 Things to Consider When Entering Into a Business Partnership
Having a business partner gives you the advantage of having someone to share responsibilities, cost and combining your talents for the benefit of the business.
Different business climatic factors might prompt you to seek out a business partner rather than going it alone. Having a business partner gives you the advantage of having someone to share responsibilities, cost and combining your talents for the benefit of the business.
Getting a business partner, starts with high expectations and enthusiasm.
However, along the way, the arrangement might start feeling like more trouble than it is worth. Know that all types of partnerships have some turbulence, and that the initiation of such arrangements is where most of the potential issues go unnoticed.
Knowing what kind of partner you want helps streamline the decision. Is it a silent partner or an equally-active one? Either way, you need to put some factors into consideration.
Before going along with the idea, however, there are some crucial factors that you need to consider.
1. What do you expect of your partner
Evaluate what your proposed partner is going to be adding to the partnership. You see, if you are seeking out a partner for knowledge and skill, then you are better off hiring them instead of partnering. Financial support is, however, a stronger case for considering a partnership.
2. Well-written partnership agreement
While getting into a company, you should consider hiring an experienced business lawyer who will help you in writing a partnership agreement. Otherwise, a poorly written consent might bring out personal liability issues in future.
3. Do not partner up based on friendships or co-worker relationships.
Starting a business is a serious step you will be making in life. A partnership should, therefore, be based on business values other than personal relationships.
4. Common priorities and goals
You need to ask yourself why the other person is getting into the partnership. Is he/she up for the task and what are their commitment in starting the business? It doesn’t matter what business it is; the other person must be equally committed as you are.
5. Can they handle the heat?
Knowing how your proposed partner can handle a tough situation is important. You should consider going into business with someone who faces challenges as they come and not someone who views quitting as the solution.
Once you are satisfied that the person you are starting a business with has what it takes, you can go ahead and lay down the rules. This will avoid any wrangles in future. Writing the rules in the presence of a lawyer and an accountant is necessary as the two will add professional advice where need be.