Tips For Starting A Partnership
If you are planning on making what you love your livelihood, whether with a partner or as an individual owner, you should have all agreements in writing. Often, when someone goes into business with a partner, it is either with a family member or close friend. A partnership agreement can be either verbal or written, but there are benefits and disadvantages to both.
Our Uplift Law team cannot stress enough the importance of having any type of agreement toward the businesses in writing. Written contracts are more desirable and have numerous benefits because they can help avoid disputes and misunderstandings. When an agreement is in writing, it allows for partners to refer to the writing at any time to clarify any potential misunderstandings.
A written agreement defines compensation, ownership shares, and duties. This ensures an existing plan before operations of the business even begin. A verbal agreement entails several disadvantages: misinterpretation by either party, too many discretionary changes, and possible immature dissolution. Simply, put your intent in writing and avoid pitfalls. Here are a few other tips we have when going into business with a partner:
>> Set some boundaries with your partner. It is easy for partners involved to constantly talk shop 24/7. But mixing business, personal, and home life can eventually produce a volatile brew.
>> Establish clear and regular methods of communication. Differences in opinion are inevitable. Consider weekly meetings to assess progress to resolve disputes.
>> Ensure the roles and responsibilities are divided to ensure maximum efficiency. Big differences can be made together but a debate on each little move can bring the family business down.
>> Treat it like a business. A common pitfall on family businesses is because there is too much emphasis on “family” but not quite enough emphasis on “business.”