Taking on a new business partner could provide your business with substantial benefits. Business partners are often brought into the fold because of special skills or experiences they have or important connections they have through different networks. Some partners are silent partners, and they are brought in purely to provide financial support to the company. In some cases, it can feel as though you are losing your privacy or giving up too much control of the company when you bring a partner onboard. You may feel as though your vision for the company is being steered in another direction without your consent. By walking through these important steps, you can avoid this type of situation and retain your independence.
Openly Define Roles
Avoid assuming that your understanding of a business relationship is the same as your new partner’s understanding. Many discrepancies and disputes, unfortunately, arise because of poor communication rather than because one partner is trying to be sneaky or underhanded. Have a lengthy, frank conversation with your partner. Do not hold back. Bring up all topics that may become an issue going forward so that you both are on the same page. Define roles and responsibilities. Talk about your visions for the company and desired short-term and long-term goals. It may seem like you’re inviting contention or conflict, but you should treat disagreements as an opportunity for everyone to get on the same page and start working together. The sooner these disagreements are brought to light, the less time anyone has to feel they are treated unfairly and form grudges.
Avoid Co-Mingling Funds
You may, unfortunately, feel like you have lost control over your business and experience tremendous stress as a result when your personal assets are mingled with the business’s finances. When funds are co-mingled, you may feel much more emotional about business decisions than you otherwise would because you have more at stake. Before you bring a partner into the fold, separate funds so that your personal finances are removed from the situation. It can be easy to try to base decisions and assign authority based on personal investment, which can degrade even the strongest business relationships. If your finances are seriously wrapped up in your business finances, find a financial advisor that can help you to sort things out.
Negotiate Excellent Contract Terms
Hiring a commercial litigation attorney to consult with periodically as needed is a great idea. This attorney may negotiate contract terms with your partner’s attorney. You can receive knowledgeable legal support and guidance from them throughout the process. It is wise to work with an experienced commercial litigation attorney because this professional may have profound experience from working with past clients that you can benefit from as you prepare for your own business contracts. Don’t be afraid to put off potential contracts for a short time so you can find a proper attorney. If the potential contract partner is unwilling to wait, you may not have wanted to be in that partnership anyway.
While hiring a partner may be one of the best steps that you can take, this setup could easily turn south. There are numerous factors that may, unfortunately, become problematic with various partnerships. These steps may help you to avoid any conflicts that may otherwise develop between you and your new partner.