Navigating a business partnership requires more than just a trustworthy partner on your side. Going into a business partnership prepared and with the proper framework in place could lead you to a successful, long-standing, lucrative business. From our experience, here are partnership situations we recommend avoiding:
Not Implementing A Partnership Agreement at Inception
Approaching a business partnership without an executed partnership agreement is probably one of the biggest mistakes you can make. We have seen countless business partnership breakups. Although it may seem pessimistic, every business relationship should be approached with the end in mind. Just as in a marriage; it is unromantic to contemplate a breakup on the way into the relationship but ensuring an agreement that spells out how each partner will go their separate ways is critical. We generally counsel businesses not to spend too much money on legal niceties up front but rather to focus on operational success. However, the one exception to that rule is creating a business agreement up front that spells out how the parties will divide assets or buy one another out.
The foundations of a partnership agreement should be completed with a qualified lawyer familiar with business agreements, contracts, and transactions, like The Markarian Group. We make sure business agreements are structured to ensure straightforward and enforceable provisions to guide all parties. Contracts can outline partnership structures, tasks and responsibilities, and how buy-outs will be managed.
Relying Too Much On The Internet
Our experience has taught us that business agreements that are available online are best avoided. We have had more business than we would like, generated by people who need advice because they entered an inferior online agreement. Avoid online contracts because a contractual agreement needs independent and well-reasoned advice that considers the specific and unique situations involved in your business, properly defines important terms and addresses all discernable risks.
Not Setting Up The Correct Partnership Structure
The thought of pursuing a new endeavor with someone that hopefully shares your vision is exciting, but be realistic, remember that businesses are sometimes difficult to sustain, and business partner relationships could sour.
Almost all business partners enter a relationship full of optimism and hope for the future with a lucrative business. The right time to strike an agreement and set parameters as to how the relationship may end, is when emotions are positive. The Markarian Group can guide you and your business in the right direction. Call us today to schedule a consultation.