Business partners often join together in business with very little paperwork and planning which tends to cause problems in the long run. Most of the time these partnerships end in tragedy due to anger, frustration and most importantly unmet expectations.
To avoid the issues mentioned above and ensure a smooth working relationship there are a few things I would suggest you clear up from the start.
Are you both working toward the same goals?
Be sure to discuss where you see your product going and more importantly how much you are going to sell your product for. You dont want the scenario of one person wanting to charge high for a few sales and less leg work while the other wanting to charge less for more sales and more leg work. Be sure you both agree on a price and the target audience or wholesalers to sell to.
So one person works a 40 hour week and the other works 20 and spends most of his time playing golf. Dont fall into this trap. Giving each other the freedom to do what they want is fine if you dont want to set timeframes but be sure that the work load is spread evenly. You dont want to be the one working till all hours while your partner sits back and reaps the benefits.
Ok so one person is easy going and the other is a hard worker, how do you think this image reflects to your workers? Will it make them easy going too? Discuss with your potential partner how they deal with certain situations and perhaps decide if one of you takes on the “boss” role with your employees.
I discussed in the work ethics section briefly about spreading the work load. I presume the reason why you want to have a business partner is to utilise their expertise or investment. If you are going to utilise their expertise you need to be sure they know exactly what they are going to do. If your business partner is an investor it doesn’t necessary mean he wants to work. Be clear on who does what and when they need to do it. Remember if you don’t cover all aspects of getting a product to market and you leave out the sales role for instance you may be stuck with no expertise in that field and no one willing to take that role on. You would more than likely need to employ someone or share the shares out further if you have no money for wages.
The question you need to be asking yourself is,
Do I really need a business partner?
Unless your potential partner can help with the growth and success of your product then think twice about this. You need someone who is going to earn their keep and do the things you cant. If there is a small area you cant do then consider employing someone or a contractor to do that job.
You need a partner to complement your skills as well as bring new skills to the business.
So you decided that going in a partnership is the best solution and you have the guy for the job, take these steps to ensure that everything is done to the book and nothing is missed.
You should create a partnership agreement with a lawyer and an accountant. Many people believe that a personal agreement is good enough and their word is a bond. Dont fall in this trap, get a agreement signed by you and the partner.