“When starting a company, find partners who will provide a unique balance to your approach and bring out the best in you, in the same way, that you will bring out the best in them.” –Michael Jermaine Cards
Benefits of a Solid Business Partnership
Who will run your business? You have created an elaborate business plan, you have gathered the items needed, you have secured the funds from a no-doc loan – Are you running this all solo or are you getting a partner?
A solid business partnership will allow your business to flourish. Not only will you have moral support, but when your partner is chosen wisely, your teamwork will create a balance to sustain a strong business foundation. Ideally, your partner’s strengths will be able to counteract your weaknesses and vice-versa.
Take a look at one famously successful partnership, the glorious union of Steve Jobs and Steve Wozniak. Jobs was a visionary who could envision trends before they happened, while Wozniak had the technological intelligence to engineer these visions. Jobs was able to determine trends in the market in an almost psychic way, and Wozniak was able to find practical uses for his insight. Together the Dreamer (jobs) and the Realist (Wozniak) were able to work together to make their business a success that has transcended decades.
Checking All the Boxes
You would think that Wozniak-and-Jobs-type partnerships come as easily as putting two people together, but it takes consideration, research and strategy to create your own “Dream Team”. There are several things to consider when choosing your business partner.
Your business will be full of sensitive information, trade secrets and generally private data. You should be able to trust your partner without a shadow of a doubt, that they will be able to handle your information with care and discretion.
Inevitably, obstacles are bound to arise in any business, creating an opportunity for conflict to develop between partners. Choosing a partner that you will help to navigate through rough patches with your partner, without worrying that it will impact your business.
2. Potential Issues
From Day One, you should lay everything out clearly and honestly with your business partner. Anticipate and identify any potential issues that you could possibly have within your business or with your partner and work together to find wise and strategic solutions ahead of time. Being able to pinpoint potential problems in advance will allow you reach a quick and clear-minded solution, should the obstacle arise.
3. Partnership Documents
When forming your partnership, it is vital read any and all agreements. More than a simple read-through, make sure you take the time to fully understand everything that is being outlined. Ideally you will have chosen a trustworthy business partner, leaving you with slim-to-no reason to worry, however, it’s not personal – it’s business. No matter how familiar you are with your partnership beforehand, or how greatly you trust them, you should never neglect to read the entire agreement prior to signing.
Separate counsel is also a wise decision. Planning for the worst doesn’t translate into a lack of trust, it demonstrates a realistic and intelligent approach to business. In the event that a partnership turns sour, you should always seek to have individual representation to present your case.
Finally, according to Entrepreneur.com, If you live in a community property state, have every business partner’s spouse sign the partnership/operating agreement and any amendments. The spouse presumably has an ownership interest in the business, and you want them to agree to the provisions of the partnership/operating agreement. This is especially important regarding the method of valuing the business when buying out a partner in the event of a divorce.
Starting a business is an adventure, full of exciting events, so it’s important to plan appropriately and have everything in order. Whether you choose a sole proprietorship or a partnership , make certain to research all legal implications and proper structuring. Especially if you personally take out a business loan, make sure you are covered legally in all aspects. That being said, a good, strong partnership is a beautiful thing. It brings support and balance to a business when it is planned out. Take time your time when selecting a partner, and then enjoy the camaraderie along your exciting journey!