It seems like the perfect situation. You’ve come up with a fantastic idea for a new business, and you even have a person (or two) who seem just as excited as you about turning it into a thriving business.
Forming a partnership comes with a lot of potential liability if you and your partner can’t work together as well as you had hoped. Even if the idea came from both of you, you might still want to be cautious about officially joining forces.
Here are some things to consider before making your partnership official.
There must be trust
Forming a partnership can have some of the same essential elements of a marriage. There is a certain level of confidence that must exist between both people to be able to move the business forward. That is especially true in the early stages of the business.
Between the finances and the big decisions, you need to make sure that your new business partner is on the same page. When one of you acts on behalf of the business, it has the same effect as if both of you were making that decision.
That means, for better or worse, their decisions have the same effect as your decisions. It’s important to make sure you both agree on where those decisions are taking you.
Have you ever had that friend who is just a little too much like you? You get along, but there are so many similarities that it can be difficult to know what to talk about because you always agree.
The same can be true of a business partner. Business is not a time to have a “yes man” at your side or even someone who genuinely agrees with all your decisions. You need to have a balance of where the ideas come from and where the business is going.
Keep in mind that, while a person who agrees all the time seems great when the business is going well, will not be the kind of partner you want when things get more challenging. When you are out of ideas, and you feel like you’re floundering, you will need to be able to look to your partner to help collaborate on a new way to move the business forward.
Establishing work ethic
It’s easy to commit to the exhausting workload of a start-up at the beginning when everything is new and exciting. It’s another thing to have that same level of enthusiasm when the business is almost ready to hire more staff but isn’t quite ready.
It can be difficult to determine someone’s commitment when you are first getting started, but this is an important piece to try to gage. Once you and your partner have made your partnership official, it can be complicated to try to go back to working alone.