Starting a new business on your own may seem impossible. Having someone else there to help you can make it a much more achievable goal. A business partnership allows you and someone else to pursue a great idea while splitting the amount of investment and risk involved in the process.
A partnership should be mutually beneficial. You are both likely excited to get started and eager to see where your business concept takes you. Before you start pulling your resources, you need to negotiate a partnership agreement. Addressing all three of the issues below will help you minimize future conflicts.
What are the commitments and responsibilities of each partner?
Will you work part-time at the company while maintaining outside employment? Will one of you work for the business full-time while the other provides financial support?
No expectations regarding partnership responsibilities should go unspoken. You need to be explicit about what you expect to do and what you expect from your partner. The more explicit and detailed you are now, the less likely you are to butt heads about perceived shortcomings in the future.
How will you handle major decisions?
Truly cooperating is a lovely goal, but it isn’t always realistic. Sometimes, one of you may have to make a decision without the input of the other or contrary to the wishes of the other.
Addressing ultimate decision-making authority in your partnership agreement is smart. You may even want to delegate decision-making authority in different areas to each partner to achieve a balance.
What happens when one partner wants to leave?
It is never fun to think about the end of a relationship, but it is important to do when starting a partnership. You can set terms now for a buyout or conditions that the company needs to meet if you want to sell the company to someone else. Thinking now about what will happen at the end of your business or your relationship can make those later transitions an easier process.
Being proactive as you negotiate your partnership and start your company can protect you and the investment you make in the business.