By ANNA FREEMAN GREER
Entering into a partnership is not something to be taken lightly. Like anything else, planning and preparation will take you a long way toward entering into a successful partnership.
Thinking of taking the plunge? Ask yourself these three questions first:
Do I Really Need a Partner?
Needing a partner must be more than just wanting someone to share in your overhead or provide some company around the office. A potential partner must be an asset to your business.
Consider whether a potential partner complements your work style. Will he or she bring something substantial to the table that you don’t already provide yourself?
What are your needs? Are there better alternatives? Have you considered whether your needs could better be met with a different office environment or by hiring an employee, vendor or virtual assistant?
Is It A Good Fit?
Dave Ramsey advises in his book EntreLeadership to “hire slow and fire fast”. His advice is in reference to hiring employees but it works here too. For a partnership to be a success, it needs to be grounded in more than friendship. It’s a business relationship, first and foremost, and should be treated as one.
Before entering into a partnership with someone, consider entering into some co-working projects to make sure you work well with one another. Sit down, on multiple occasions, and discuss what your expectations are for the potential partnership to make sure your visions align. Visit your potential partner’s current office to observe their working environment. Have dinner out with them and their spouse. Meet with their prior co-workers or partners.
What is the potential partner’s current financial situation? How much money are they willing or able to put into the company? Are you on the same page as to how much money will be spent on an office lease, office décor, a website, branding, and other office essentials?
These are sometimes uncomfortable conversations to have or may seem unnecessary and time consuming when you are overwhelmed by the excitement of a new business and potential partnership. But, they are necessary. Take the time to consider whether the other person is a good fit for you. Pay attention to any red flags, trust your gut, and don’t be afraid to walk away if it doesn’t feel right.
Are They Willing To Put It In Writing?
It’s not enough to just talk about your vision for the business. Consider whether you both are willing to actually write it down. Writing it down will bring to light other important considerations, issues and expectations.
Every partnership should have a partnership agreement, in writing, setting forth the partners’ expectations, roles and responsibilities. It must also outline an exit plan. The exit plan is a crucial part of the partnership agreement should a partner exit, voluntarily or involuntarily. Most importantly, have an experienced attorney draft the agreement for you. A poorly drafted partnership agreement can cause unnecessary issues, legal or otherwise.
Anna Freeman Greer describes herself as “entrepreneur first, attorney second.” After starting and building her own law practice in 2009, she quickly realized her passion for helping other entrepreneurs and small business owners launch and grow their respective businesses. Visit her at www.annafreemangreer.com.