One of the perks of being your own boss is being able to call the shots. From the hours you work to the people you work with; you don’t have to answer to anyone. However, when you decide to become partners with a trustee business associate, you no longer are the only head honcho. Successful partnerships are built on trust and excellent communication skills.
But just like any other relationship, partners can butt heads. To ensure your current or potential partnership goes smoothly, we created a guide of the top tips you’ll want to bookmark.
Evaluate Their Belief System
You and your partner need to share the same vision. If you dream of opening a pizza shop while they see themselves running a coffee house, it probably won’t work out well. Both of you should be on the same page in terms of ventures, goals and values. Talk openly and lay the ground rules prior to entering an agreement.
As a solopreneur, all the financial responsibility. However, in a partnership, you both shoulder the responsibility, including negative ones. For this reason, you need to have the proper financial resources and insurance coverages in place.
For instance, you should always have insurable interest in a life insurance policy set up. If you’re not familiar with the term, there are plenty of guides online you can review that explains it in detail. But in simple terms, it refers to the possible financial need a beneficiary may have after the loss of their partner.
You Should Complement Each Other
You and your partner’s strengths should be complementary to each other. If you’re more of the outgoing type who doesn’t mind meeting with customers while your partner favors working behind the scenes, you both can focus on what you do best. However, if you try to put yourself in a role that’s not your strongest suit, it could lead to miscommunication and resentment.
Choose the Right Structure
The business structure you choose is just as important as the person you partner up with. There are several entities to choose from including an LLC, S-Corp or C-corp. Each entity has different rules when it comes to filing taxes and protecting your personal property. It’s always best to speak with a lawyer prior to registering your company formally.
Get it in Writing
As with any type of business venture, you need to put everything in writing. This not only protects you, but your partner as well. Together, decide what specifics will go into the contract and what will happen if the company goes under or you need to liquidate assets.
You can avoid an unpleasant power struggle by designating responsibilities. Together, decide who will manage the front end and back end of the company. This will eliminate the risk of misunderstandings down the road. When you both recognize and agree on the art of time management as it pertains to delegated responsibilities you will find an agreeable harmony easily.
Honesty and transparency are the hallmarks of any great relationship. Be completely honest about what you want to out of the partnership and what you expect as well.