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Health & Fitness

To Partner or Not to Partner.

Partners can be a REAL good thing.  Not doing “IT” all alone is very nice. Perhaps you have different personality types and you are Ying to the other’s Yang.  Or maybe one is the vision and creativity while the other is the detail-oriented make-it come to fruition person. You and your best friend have been glued together since elementary school and you just have not gotten around to writing it down.  Or does the idea of sitting down to count pennies and talk about your disagreements seem unsettling and nerve racking? Think of it as good practice for ACTUALLY working together!! It is more than a marriage.  I still have some things I don’t share with my husband (Don’t worry he knows about them – but sweating , huffing and grunting through sit ups in front of him is not for me!).  A business partner has to know all the sweaty, gory details AND you will have to practice working it out.  So setting the ground rules as early as possible can save hurt feelings, set realistic expectations and save a full out brawl that can include the expense of litigation fees or the ruin of your company! So let’s talk partnership agreements.

Sure it can be uncomfortable but it needs to be done sooner rather than later.  Do you really want to wait until you disagree on a client project?  Or even whether or not to offer additional services per a client request?  At the end of the first year, what if one of you wants to reinvest the profits to grow the company and the other wants to buy a fun trip for their family?  What if something horrible happens?  Aren’t you building your business to contribute to your way of life?  What if you have a family that relies on your income?  What will they be left with when your business partner is busy trying to keep the company afloat and ends up doing all the work?  Will your partner expect full ownership at that point? 

I am NOT suggesting that you arm wrestle over each and every contingency. However there is one item you MUST decide right now.  How will decisions get made? Equality of votes means that disagreements are not going to be resolved.  Certainly there are ways around this.  Perhaps you divide departments with each of you getting the deciding vote in that particular area.  Will that deciding vote change if there are more dollars or employees affected?  Sometimes an advisor to the business could be considered as an informal mediator in real standoffs. You could also consider an agreement to have disputed decisions reviewed after an appropriate (and agreed upon) time period. You each need to imagine that there could be something that you each fundamentally disagree on and cannot sway the other to come around.  What decision process can you live with

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Once that is decided then you can go down a general, or specific, list of how the business will work.  Strategic planning – how often? Operational consideration – who does what? Sales - Who is in charge of closing?  Finance and accounting – who sets the budget? HR – who will supervise? Hire? Fire? Exiting – how and when can a partner exit? And finally there is the prize-fight-potential subject of compensation – who gets what money and when? Writing down what you discuss allows for a reference point when the emotions get high and the personal side of the discussions get muddled.

Tasks, roles, “decider”, money – You and your partner may never disagree and you may be wildly successful with each individual choice combining into one business. Deciding the name of the business , the vision and the process for the deliverable may SEEM like the hard part.  Far too often, and usually crisis driven, you and your partner will have much harder choices.  That piece of paper can save the relationship AND the business.

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Together, we will beat the high failure rate of small business!

As always, I'd love to hear from you.   Feel free to email me at TAnderson@PBAdministrators.com.

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