What you need to do to build a strong foundation for your business partnership
Being old-fashioned is not always a bad thing when it comes to business partnerships. It’s important to determine each other’s roles early in the relationship. Once you determine the structure of the business and possible outcomes of the relationship, it’s much easier to bring in a lawyer who creates an Operating Agreement between you and your partner.
These are 5 rules to keep in mind for partnership negotiations:
- When negotiating revenue splits, don’t try to fight for every last percentage point. Sometimes it’s better to go for an even split so things feel fair.
- Get everyone on the same page. Both partners should agree on any decisions made about the business.
- Determine long-term goals that benefit both partners, not just one.
- Make a deal with your partner that you would like to have for yourself and consider your partner’s concerns.
- Pick a partner who brings good character and trust in the relationship.
If a partnership is built on a solid foundation, it will take you a long way. Picking a partner you trust is the first step of building a strong business partnership, but trust is not enough to maintain the partnership. Only thorough planning and prevention will prevent major disputes between partners. The bureaucracy in the beginning will save you a lot of stress (and money) as your business grows. Find out more about our firm’s unique 4-step process of creating Operating Agreements.