Going into a business partnership may seem like an easy option. You have someone else to share the worries, the funding and the work. Yet, it can be fraught with problems, especially if you do not take the time to set the partnership up properly.
Many business partnerships fail. That may seem surprising, yet if you think about other relationships you have had, many of them will not have lasted either. Two people will never have the same ideas about everything, and when money is involved, it adds pressure and can exaggerate the differences.
What question should you ask before entering a partnership?
Here are some questions to ask yourself before entering into a business partnership:
- Why do you want to go into a partnership? What do you lack that you need someone else for, and are there easier ways to secure it?
- Are you sure you have found the right partner? Someone might be your best friend, but they might not be your ideal partner. Make sure you do not limit your options when searching for a partner.
- What are you willing to give up? Once you go into business together, you must be willing to compromise on all sorts of issues. Even if you retain the majority share, your partnership will not work if you always expect to get your way.
- What do you expect of your partner? If you intend to work day and night until the company succeeds, you need to be sure the other person has the same idea. If this is one of a few businesses they are involved in, or if they have a family, they may not be able to dedicate so much time and energy. That is fine, as long as you are both clear about things at the outset.
Perhaps the most important thing to know before you enter a partnership is how you can end it. Spelling this out now reduces the chance that your business partnership culminates in a legal battle.