Entering into a business partnership with someone can seem like a great idea, but as most partnerships do, can also get messy. Disputes and disagreements can arise and can be difficult to handle. The best way to avoid major blowouts is to have an in-depth agreement made with your business partner to set expectations, responsibilities, goals and more. This article covers the most important points that every business agreement must have.
It’s important to sit down and discuss your expectations with your business partner early on in your process. Talk about things like expected salary, how much cash infusion each partner should provide, what you expect to get out of the business as well as how much you expect to put into it. Layout these expectations in an agreement so that there are no arguments after you’re already well into the process.
Each business partner should have a role in the business. Have a discussion about your responsibilities and your partner’s responsibilities, as well as how much time each co-founder plans to dedicate to the business. Setting these expectations will hold you and your business partner accountable to be responsible for your portion of the business and will hopefully help y0u avoid any resentment in the future.
Discuss how you intend to handle any future disputes that may arise while the business is up and running. You may want to include a plan for mediation in your agreement as well as how to proceed if you can’t come to an agreement.
Make sure you have in writing that you and your business partner both have liability in the business. You should share the debts in the business and know your personal assets could be exposed to creditors.
The last thing you should have on your agreement is a written representation of your goals. Explain in writing your vision for the company, as well as your partner’s. It’s a nice touch at the end of a business agreement that you can look back on to see if you’ve accomplished those goals.
Photo courtesy of Taylor Johnson by Flickr.