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3 things to consider before entering a business partnership

On Behalf of | Sep 30, 2022 | Business Formation & Planning

A lot of people end up in business with someone without enough thought. Maybe they were already friends, or perhaps circumstances just threw them together.

Yet, the success of your business will depend on the success of your partnership. Human relationships can be extremely complicated, and when there is money at stake, they can easily become strained.

If you are considering going into business with someone, think about these things first.

What do they have that you do not?

Maybe they have the money you need. Maybe they have skills that you do not. Those are good reasons to work with someone. However, first think about whether you could acquire those things yourself. It might involve a bit more work, but in exchange, you would have more freedom.

How well do you really know them?

How many couples have you seen split up after moving in together and discovering that the other person is not the ideal partner they thought? It is easy to put on a good front for a while. Yet, when you decide to spend much more time with each other, people’s true personalities can come out. It is as true in business as love.

What happens if it does not work out as planned?

Up to now, your relationship has been great. It seems you agree on everything. Yet no two people can truly agree on everything, and with time your differences will come through. If you have a 50-50 split of the company and disagree on something, how will you decide what to do?

You always need to prepare for things not working out and potentially needing to end the partnership. If you think you have found the right partner, seek legal help to document the terms of your relationship.