How to Choose the Right Partner for Your Business Venture
Selecting a partner to join with you in a business venture is, in many ways, similar to choosing someone to date and eventually marry. In fact, you will probably spend more waking hours in an average week with your business partner than you do with your spouse, making the decision all the more important to get right. And, like marriages, most business partnerships begin with excitement, high hopes, and starry-eyed visions of the future, yet many end with bitterness, acrimony, and broken relationships.
In my practice as a business formation attorney, I have helped countless clients develop partnership agreements designed to optimize their company’s future. No matter how solid the agreement contract may be, however, your chances of success hinge on choosing the right person as a partner.
What Do You Need?
Before you choose an individual, you will want to have an understanding of exactly what you are looking for in a business partner. The attitude of “I’ll know it when I see it” is too unpredictable when making such an important decision. You probably have an idea of the role you would like to play in your venture, and your potential partner’s role must complement your own. If you need a silent financial partner, find one. If you have the necessary capital and you want someone to run your day-to-day operations, that is certainly an option as well. By understanding your needs from the beginning, you can avoid complications regarding expectations down the road.
What Does Your Partner Need?
It is also vital to see potential partners as individuals as well. They will have business aspirations of their own, along with unique personal situations that provide their own motivations, and, yes, potential distractions. Does the person you are considering need to feel in charge, or is he or she content to work in an equal capacity as you? Will he or she be able to remain focused on your partnership or will multiple involvements and family situations require more immediate attention on a regular basis? You should also understand how willing and able your potential partner is to stick with the company during the first few years, while you establish your true profitability
Will Your Partner Agree in Writing?
Handshake agreements, while honorable, will provide you and your partner with virtually no security. Often, it is in the course of developing a written partnership agreement that potential issues are exposed and addressed before they become actual problems for the business. The terms of your agreement will need to contain provisions regarding roles, responsibilities, financial considerations, and expectations. Be sure to include buyout clauses or other mechanisms for dissolving the partnership, so that, if necessary, one of you may be able to move on in the business without the other. By preparing in advance, you may be able to avoid some of the contentiousness that often accompanies the end of a business partnership.
Our Team Can Help
When you are considering starting a business with a partner, you should not do so without consulting an experienced Naperville business law attorney. Attorney Denice Gierach has been assisting area clients with business and partnership agreements for more than 30 years, and she is ready to put her knowledge and skill to work for you. Call 630-756-1160 to schedule an appointment at the Gierach Law Firm and let us help you prepare to be successful.