How to Know if a Partnership is the Way to Go

Partners start businesses all the time. Sometimes they are friends, sometimes they are acquaintances. Sometimes they have known each other forever, sometimes not. Always, however, there is a common interest.

It may be passion for the business, or it may simply be profits. It could be both, and often it is. The problem comes when the partners are on different wave lengths about the importance of each.

How do you know that a partnership is right for your business? Consider these questions and tips.

How long have you known your would be partner, really? Do you know them, or do you just know of them? Before you become partners with someone, you should have known them for at least a year.

Partnerships are not something to be rushed into.

This doesn’t mean you have to be best friends, but you should spend time together on occasion. Know each other’s lives and lifestyles. Know what you have in common and what you don’t. You should enjoy each other’s company and have enough in common and know each other well enough that conversations flows naturally and with some detail.
Partners should be beyond small talk and awkwardness.

Make Sure You Are on the Same Page
If you know them well enough this determination should come easily. Before you commit to a partnership make sure your goals and reasons for being involved in the business are shared. Consider how the decisions making process will work. Do you both agree?

Do you have the same goals for growth and profit? What about company culture? Too many partnership struggle because these things are not considered on the front end.

Get it In Writing
You cannot have too much detail in the contract. Note how you will split authority, how decisions will be made, how profits and debt will be split, and buy out procedures should the need arise. Anything and everything that could happen should be considered, a plan agreed upon, and put in writing.

It is best to utilize a professional in this phase. An attorney that specializes in partnerships can help you make all the necessary considerations and be certain the partnership contract notes them all effectively.

These are generalizations that may not apply to all situations, but chances are they apply to most. Another thing partnerships have to consider is financing. Biz2Credit has an extensive network of lenders that offer small business loans to various types of businesses, including partnerships. We can help you find the perfect lender for startup needs and beyond. Visit today for more information.

Faith Stewart

Faith Stewart is a wife, mom, and freelance writer. She earned a BBA with a major in accounting and spent 10 years working in the fields of finance and accounting before pursuing her passion for helping small business owners and entrepreneurs through writing.