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, business partnerships end in tragedy that is characterized by anger over unmet expectations and false promises, which results in the potential loss of the business and relationships. To avoid these issues, ensure that you have a professional working relationship with your business partners. Here are a few suggestions.
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 in the market. You don’t want to engage in a scenario in which one person wants to charge high for a few sales with less leg work while the other wants to charge less for more leg work. Be sure that you both agree on a price as well as the target audience and wholesalers.
One partner works 40 hours a week and the other works 20 hours a week with the remainder of his time on the golf course. Do not fall into this trap. Giving one another the freedom to do what they want is acceptable if you do not want to set timeframes or deadlines. However, be sure that the work is evenly delegated as you do not want to be the one working all hours while your partner sits back and reaps the benefits.
One partner is easy going and the other is a Type A personality. How do you think this image reflects to your workers? Will it make them easy going as well? Discuss with your potential partner how they approach certain situations and decide if one person is better to take on the role of “supervisor” with your employees.
I briefly discussed work ethics and delegating the work evenly. I presume the reason that you want to have a business partner is to utilize their expertise or investment. If you plan on utilizing their expertise, ensure that they know exactly what they are going to do. Remember that if your business partner is an investor, this doesn’t mean that wants a full-time role outside of funding the project. Be clear on work responsibilities from the beginning. Remember that if you don’t cover all aspects of getting an invention to market and, perhaps you leave out the sales role, you may be stuck without expertise in that field and no one willing to take on that role. You would more than likely need to employ someone.
The question you need to ask yourself,
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 that can’t. If there is simply a small area that you can’t do, then consider employing someone or a contractor to do that particular job.
You need a partner to complement your skills as well as bring new skills to the business.
If you decided that a business 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 omitted.
It is always good practice to create a partnership agreement with a lawyer and an accountant. Many people believe that a personal agreement is good enough and that their word is a legal bond. Do not fall into this trap. Obtain an agreement and have both you and your partner sign and date it.
If one partner decides to break ties from the business, it’s important to have an exit strategy. There may be a clause that the other partner is obligated to buy out the partner’s interest. For example, a pre negotiated percentage of the value of the business. If both partners decide to give up the company if the product fails, then all assets are to be divided according to the share stake they have in the company.