Entrepreneur’s Guide to Operating with a Business Partner
Many business partners start out rather casually, without setting ground rules, boundaries or outcomes. This leads to problems later on that can devastate the business. Unmet expectations, conflicting work ethics and different financial goals are issues that can cause conflict among business partners. Whether you’re already working together or just starting out, here are some tips for operating with a business partner.
Communication is key.
Business partners have to be comfortable talking to each other. You have to be able to express your opinion, ideas and expectations freely. Get to know your partner to test their personality and core values before you formalize your partnership. Establish routines about daily communication, but make sure to plan times to discuss the goals and future of the business. At least once a quarter, you should have a meeting to re-evaluate your goals and objectives.
Put everything in writing.
When you’re organizing your business, write things down and formalize your business. This is one time you should consider getting legal advice to make sure you’ve covered all your bases. What happens if a partner should divorce or die? Thoroughly plan for every aspect of the business, from finances to dissolvement. No one wants to think about their business not succeeding, but the reality is that many small businesses fail in the first few years. You need to have an exit plan. Address compensation. List roles and responsibilities.
Approach a partnership with restraint.
Consider whether you really need a partner before establishing the partnership. Whether you’re partnering with friends, family or a stranger, make sure to fully vet the person. If it is someone you know, are you willing to risk that relationship outside of your business if something goes sour? Don’t move into a business partnership quickly. Take your time and make sure you’re doing what’s best for the business.
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