Entrepreneurs tend to begin their road to small business alone - a sole proprietor structure limits the accountability and makes the tough decision making just a tad easier.
After all, it is their headstrong egoism that has driven them to get this far and battling another like-minded partner can mean rough seas for a start up.
At a certain point in the development, partnerships become a valuable consideration. Partnerships can create more freedom and provide the potential for achieving better profits.
They can also be potentially volatile. Before considering forging a partnership ask yourself the following questions:
A successful business depends on decision making and that’s not always possible when key stakeholders have equal say. A 49%-51% is about the best that can work for a business but if that’s not possible consider creating a board to settle disagreements.
Once the guidelines are decided, form a binding agreement. A solid contract clarifies the relationship when questions are raised.
The Small Business Association suggests the partnership agreement should include:
With these ten factors reduced to writing each partner can focus on achieving the agreed vision and not be distracted by internal disagreements.