There are many benefits to having a business partner. Complementary skills and pooled resources will help advance any business. Yet, there are certain things to consider before entering into a partnership. Limit your search to people who have passion for the business, who compliment your skills and character, and who will bring something new and unique to the venture. By all means, take experience into account.
If you have met a promising candidate-partner and want to get to know them better, it would be smart to run a background check. This will help you weed out people who may end up becoming a liability or discrediting you to clients.
Good Communication is Key
Communication with your prospective partner should be aimed at letting both parties set their expectations forth. You could decide to cooperate on a practice project for one or two months before making a commitment, like a test run. Consider the legal implications before entering into a partnership agreement.
It’s important to have a good grasp of various legal partnership forms, decide on profit splitting, consider forms of taxation, and even think about how you would cope with a scenario where you decided to part ways with your partner. A lawyer and an accountant can prove pivotal to any outcome.
Do You Really Need a Partner? How to Know
At one point in the process, you might realize you don’t, and that’s perfectly normal. We don’t always understand the reasons we might need a business partner. We’re afraid of going at it alone or we hope a partner might bring the connections, skills, or financing we lack. There’s never a guarantee for this. It’s possible to get someone’s help without letting them into your business. One option would be finding a mentor or hiring someone to bring a network, capital, or skills to your establishment.
Each partner should be aware of the different responsibilities they will have and their roles in the partnership. It’s important to reach an agreement on the time obligations expected even though partners don’t have to work the exact same amount of time. The time will come to distribute profit, and you don’t want arguments over individual results and efforts. What’s more, establishing roles in advance will help avoid needless emotions over who has more authority. The business’ interest should define daily efforts to run the company.
You should always have a partnership agreement in place, but before getting to that, examine the person’s vision of your joint initiative and their personal goals. While this is no guarantee for a successful outcome, it will help avoid unpleasant surprises and core discrepancies at the very least. You can do an online search using their details, ask them for references, or even invest in a professional background check.
Put It Down in Writing
Even if your state doesn’t have a legal requirement for a written agreement, a solid partnership agreement will protect you from damage and personal liability. What’s more, an agreement will help implement your business vision and help you resolve any issues that arise. If you don’t have an agreement, the partnership law in your state will govern any disputes, and it probably won’t do any partnership intricacies justice.
Direct the Business Towards Profit
To create value for clients and generate profit, partners must have an equal commitment to the venture. Considering potential accountability is fundamental on both sides. You need to give ways to measure outcomes and performance very carefully.
Deciding whether you need a partner from the get-go and how you will collaborate in terms of roles and responsibilities, compensation, and exit clauses will create a reliable mechanism for a fruitful partnership. This will enable you to focus on what’s most important – your joint venture.