There are many benefits of going into business with a partner. Not only do you have someone to lean on, but they also bring their own expertise and knowledge to the table.
However, you shouldn’t assume that just anyone will make a good business partner. It often takes some work to find the perfect person with whom to join forces.
Here are some tips you can use to establish a good business partnership:
- Try it out for a test period: Before you go all in, work together for a few weeks to see if it’s a good fit. This will give you a clear idea of how to proceed. There’s nothing wrong with walking away at this point.
- Talk it out: Sit down and have an open and honest conversation about becoming partners. Discuss the benefits, potential drawbacks and how you see the relationship evolving in the months and years to come.
- Create an operating agreement: This is designed to outline the terms and conditions of your partnership, such as what each individual is responsible for. It may sound like overkill, but it’s critical to ensuring that you’re on the same page from day one.
- Maintain an open line of communication: Many business partnerships fall apart because the partners don’t talk. Instead, they go about their own business, sweeping concerns under the rug as they do so. With an open line of communication, it’s easier to deal with disagreements head on, thus avoiding a situation in which things boil over.
- Choose the right business structure: With the help of your partner and a tax professional, decide what type of business structure suits you best. There are a variety of options, such as a limited liability partnership, limited partnership, general partnership, S corporation and C corporation.
These tips should help you outline a process for establishing a good business partnership.
As you move through the steps for getting started, pay close attention to each and every detail. Doing so will go a long way in preventing issues, both now and in the future.
When you make everything legal and you and your partner are on the same page, you’re positioning your company for success.