A dispute with a business partner can get messy and expensive — and it’s always going to be disruptive to your business. So, what’s the most effective way to minimize the disputes you may have?
Choose the right business partner in the first place. Just like a marriage, a business partnership is never something to enter into rashly.
What makes a good business partner?
Every situation is different, but you want to select your business partners based on how well you fit together — not just their willingness and availability to join in. Here are some of the key questions to ask yourself about every potential candidate:
- Does this person bring something to the business that you cannot? Maybe you have a great deal of creative vision, but little technical knowledge when it comes to business operations. Someone with “dry” knowledge of the business world could be a good compliment to your skills.
- Does this person share your vision and values? You need to have a clear idea of what your company is all about and what it brings to the world. You can’t do that if you and your partner aren’t on the same page. Similarly, it can also be difficult to work with someone whose personal values don’t align with your own.
- Is this person stable (emotionally, personally and financially)? If someone has a string of failed businesses and bankruptcies in their past, that’s a bad sign. If they’re prone to emotional outbursts, that can negatively affect your entire company culture. If they’re always in a hot mess in their private lives, how focused can they remain on the business?
- Do you and the person share the same work ethics. Running your own business is a large financial, time and emotional commitment. If you don’t both share the same commitment to the venture, it will probably lead to issues and resentment between you.
Ideally, your business partner will add stability, credibility and value to your business, so keep that in mind when you’re looking to partner up. Then, make sure that you have a strong partnership agreement that spells out the specifics of your job duties, investment, remuneration and more.
Finally once you have a good business partner, meet with a knowledgeable business attorney to help get you started and work out an agreement between you regarding the business.