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How to create a successful business partnership

It may seem logical to go into business with your best friend, but is it a good idea? The stresses of doing business together have destroyed many good relationships. Here are some things to consider:

Why are you going into business together?

Do your skills complement each other? Do you even need a partner?

How will your roles be split?

Clearly defined roles can prevent you from stepping on each others’ toes. Knowing your responsibilities helps avoid tasks falling down the gap between you.

How will the finances work?

If your business needs new inversion at some point, will you contribute equally? If one partner cannot afford to invest as much as the other, how will this affect ownership? What about taking money out of your business? Do you agree to receive dividends at a certain point, or does one of you want all profit reinvested to grow the company?

How will you agree when you disagree?

When one of you says left, and the other says right, how will you decide if you are a two-person team? Maybe you agree to play paper, scissors, stone for any such decision, but best of three or best of five? Many business partners choose to avoid this confusion by setting one partner as the majority shareholder. That way, you both know who has the casting vote.

Take the time to have an honest conversation about these things with your potential business partner. If you can do this, it bodes well. A partnership agreement can formalize your discussions, paving the way for a great working relationship.

 

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