Dysfunctional partnerships are a major source of business failure. They suck energy and time away from building the business. They can often lead to the break-up of perfectly good businesses.
That being said, I think that if I have to pick one element as the most important it would be that you and your partner(s) share the same values, aspirations, and vision for the new venture. This requires a careful and thoughtful discussion of critical business issues BEFORE the business is ever launched.
Work with your attorney to create a shareholder agreement before you officially incorporate. Just as marriages can fall apart on the honeymoon, business partnerships can fall apart before the first sale is ever made.
Here is just a sample of some of the issues you should discuss with potential business partners:
- Do you share the same vision for the business?
- Do you share the same aspirations for the business in terms of its size?
- Are you all going to make the same level of commitment of time to the business?
- What are your work habits and work ethic?
- How much time off to you plan to take each day, each week, each year?
- How much money will you put into the business? And how much do you expect to get out of it?
- Who will be the President of the company? What roles will the other partners play?
- How strong is everyone's credit rating? Can all partners help to guarantee a loan, if necessary?
- What if one of you gets married and the new spouse gets a job offer in another city? Would you move away?
- How will employees, customers, suppliers, etc. all be treated?
Business partnerships can be a successful experience for everyone involved. But it takes open and honest communication and careful planning.
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