One of the benefits of beginning your own business is choosing whom you want to deal with. If you’re going to start a business with a close friend, family member, or former coworker, don’t think everything will go smoothly just because you know one other.
Follow these tips to keep your business collaboration on track.
1. Value the same things
Don’t start writing your business plan unless you and your partner agree on your new venture’s same aspirations, goals, and vision. Do you envisage a part-time catering business that allows you to spend more time with your family while your partner dreams of opening the next Starbucks? If you want the business to flourish, you and your partner must have the same fundamental beliefs, goals, and work ethic.
2. Pick a partner whose skills complement yours
If you and your business partner have complementary skills, you’ll instantly treble the power of your startup team. For example, a shy IT professional who wants to start an Internet company should team up with sales, marketing, and people skills. This allows both partners to focus on their strengths and interests.
3. Track record of working together
It is not necessary to have managed a business together or even worked together in the past to succeed as business partners. It does, however, necessitate a track record of effectively overcoming similar obstacles in the past. Look for a partner with whom you’ve already dealt with disagreements, achieved similar goals, and weathered difficult times.
4. Clearly outline the roles and duties of each partner
An informal organization in which each partner does what is required may succeed in the early stages of a business but not in the long run. Defining each partner’s job title and responsibilities helps eliminate disagreements by giving each spouse responsibility in their respective areas. Employees and customers benefit from knowing which partner is responsible for certain aspects of the business.
5. Choose the appropriate business structure
A general, limited, or limited liability partnership are all option for forming a Business partnership. It can, however, be organized as a C corporation or an S corporation. In terms of liability, taxes, and continuity, each type of business offers advantages and disadvantages. Consult an attorney or other knowledgeable counsel to help you decide which business structure is best for you and your partner.
6. Make sure you document it
Even if you’re starting a business with your kindergarten best buddy, you’ll need to draught legal paperwork that covers your business structure, capital contribution, decision-making process, dispute resolution, and what happens if one partner wants to leave the company. It’s easier to deal with any challenges if you go through all the things that could go wrong and how you’ll address them.
7. Be open and honest with one another
To make a relationship work, you must both feel at ease communicating your opinions and working out any disagreements. Soft-pedalling your true feelings out of fear of hurting your business partner can produce more problems than it solves. Sweeping your issues under the rug will only result in resentment and hate, which will eventually destroy your relationship—and your business.
These are complex topics to broach, especially when you’re ecstatic about your startup and can’t wait to get started. Your new firm may never get off the ground unless you take the time to set the groundwork for long-term business collaboration.
Partnering with the right company could be the next step in the growth of your business. The success of your collaboration will be determined by how you approach, create, and manage it. Follow these steps to produce something that both partners can build together to make your partnership last.