Most people agree to a partner because it takes some weight off of their shoulders. Of course, a business partnership should be mutually beneficial and ultimately help the company reach its goals. But when responsibilities are not split up equally, the partnership might be at risk. Partnership problems can often be solved through counseling, but should ideally be settled with the help of an existing Operating Agreement. If all hopes are lost, the only option is to look for a new partner or leave the company. Here are 5 factors that indicate your business partnership might be at risk:
- If you don’t communicate early and often, frustrations will build up and cause small issues to escalate quickly. Maintaining effective two-way communication is not only important in order to be understood, but also to understand. Third parties such as therapists, counselors or mentors can help resolve problems by providing objective feedback. If communication problems are persistent, it might be time to find a new partner or leave the company.
- Mistrust is a factor that keeps business partners from operating effectively. If one partner has a hard time allowing the other partner to make solo decisions, business processes will be slowed down tremendously.
- Even though conversations about hypothetical conflicts can disrupt the excitement about a new partnership, they are necessary to get on the same page. If there is no Operating Agreement created in the beginning, small conflicts can become very costly for the business.
- Big egos often get in the way of a successful partnership. Ideally, partners should be equally important for the company. If partners are unwilling to put their ego aside and solve problems in a calm matter, it will be difficult to run the business together. To avoid any power struggles, you need to ensure that everyone knows their place and purpose in the company.
- Unclear roles and responsibilities can cause confusion and disagreements. When business partners have complementary skill sets, the person with a certain area of expertise should be in charge of making decisions in that regard. A legally binding Operating Agreement, created in the beginning of a partnership, should clearly outline roles and responsibilities.
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Taking care of formalities early in a business partnership saves you from possible legal battles later on. Learn more about our 4-step process of creating Operating Agreements at http://speralaw.com/louisiana-operating-agreement