Problems May Arise
One of the biggest reasons companies fail is due to partnerships gone wrong. We often don’t look far enough into the future when asking ourselves this one question: will we both be engaged, and will we both bring value equivalent to ownership long-term? It’s one thing to have a shareholder, but if you go into business as 50/50 partners there will come a point where you will have some problems, and this can kill your business.
Balancing the Scales
For a lot of businesses, a visionary or leader will partner with a technician and, oftentimes there is a struggle for who is running the company. Later, someone starts to fall adrift and lives in their own world, or you wake up and one party isn’t pulling its weight, and there is frustration and negative energy that hurts your team and potentially your customer.
Prior to partnering with anyone, you need to establish some clear expectations, document them and sign them. We recommend you think hard about and discuss very openly the following questions:
- Who is calling the shots and making the ‘final say’ when running the company?
- If you or your partner is the CEO, is the other partner willing to take directions?
- How will compensation work?
- What are the short-term roles and responsibilities?
- What are the long-term roles and responsibilities?
- Who owns what and why?
- What is the company’s ultimate goal?
- What happens if one party quits delivering?
- Have you reviewed and understood the USA agreement?
- Why does this partnership make sense now and in 10 years from now?
Negotiation and Decision-Making
After reviewing, documenting, and signing off on the answers from these questions, you can decide if this is a partnership you want to pursue. I have been in bad partnerships and great partnerships. You learn quickly after you get stung from a partnership that has gone wrong. If this is new to you, I recommend you follow these 10 questions to review with your partner. It is very important to take your time prior to jumping into any agreement and if you’re not comfortable saying what’s on your mind, you will wake up in pain! Take your time, ask the right questions, and decide if it is what’s best for the company looking far into the future.
If you have questions about your existing partnership or your new partnership, give our office a call and will help assist you. (833-AIO-IDEA)