Thinking of bringing on a business partner – read this first!
So it’s time for you to bring on a business partner, but you are a bit wary about giving up part of your company, the acclimation process and long term will this business marriage thrive or end in divorce? All valid worries – but there are some tried and true proactive measure that will ease the transition for both you and your new better half:
Put everything in writing - Part of Sandler’s Management Solutions includes developing accurate and functional job titles. This is not relegated to employees, but applies to owners as well. Drafting up pertinent documents and business agreements will detail each partner’s specific role, obligations and any other type of responsibilities. This allows each partner to understand what is expected from the very outset. Once that is in place, other Sandler Solutions can help in ensuring that the partnership is a successful one.
Protect general partners - Your new partner might not be an equal shareholder. In that case, the partner with less than a 50% share is referred to as a limited partner. This is important to note because in the event that the business gets sued, limited partners are only responsible for what they invested in the business. Remember that the general partner, or person who owns the majority of the business, can be sued for personal assets.
Establish easy exit options - Your new partner may not be in for the long haul. That’s why it is integral to prepare exit options, even as your new partner enters the business. To ensure a smooth transition, draft up a simple exit strategy for a new partner. Something that makes it easy for a partner to leave could help when it comes to avoiding any messy situations in the future.
Find the right fit - There is more to just dollars and cents when it comes to bringing on your new business partner. Your new partner does not need to possess the same strengths that you do. Actually, finding a partner who has skills that complement yours often make for a more successful fit. However, your new partner needs to fit in with the culture of the business. These appropriate fits will make for a more fruitful partnership.
Work through conflict - It is inevitable that conflict will occur in any kind of business partnership. However, conflict is not always a bad thing. It is how two partners work through that conflict that matters most. The sooner the conflict occurs, the better it is for the business. Knowing that each partner can work through conflict helps to establish trust, accountability and an openness moving forward..
In the end, spending some time thinking of the “what ifs” now, will save you a lot of headaches in the future. Don’t forget to rely on the experts – Attorneys, Accountants and Organization Development teams to make sure you are on the right track to success!
Founder and Managing Partner
Sandler - Peak Sales Performance
Learn more about Ed at http://www.linkedin.com/in/edschultek