Starting a business partnership is a fun way to build your dreams with someone you trust. There’s nothing wrong with getting into business with a friend. But there are some pitfalls and disadvantages to be aware of.
For example, you may encounter these common challenges:
- Casual interaction eroding respectability in business dealings
- Difficulty determining who has what authority
- Reluctance to confront your friend over a business disagreement
The following tips will help you minimize problems and get your partnership off to the best start possible.
- Avoid getting into partnership because of friendship, alone. If your decision is based on emotional attachment or a sense of owing someone a favor, there will be damaging legal and financial repercussions if something goes wrong. Carefully select your business partner on the basis of their skill set. Ask questions about a potential partner to determine their suitability.
- Have those tough conversations at the beginning. In the beginning, you and your partner will be so excited, bubbling over with ideas. It feels great to plan with someone who shares your values and visions and it may seem petty to worry about sharing profits just then. But both parties must be willing to discuss that right from the start.
- Get legal advice. You can’t predict all that can go wrong. But with a solid legal foundation, you can minimize potential issues. Legal protections make it easier to draw the line between business and personal relationships. You’ll also need advice on registration and drafting agreements.
Find out more on setting up a legal safety net for your business partnership in Augusta by consulting Fred M. Kennedy, P.C.
Posted on behalf of Fred M. Kennedy, P.C.