What should you consider before starting a business partnership?

On Behalf of | Jul 20, 2019 | Blog

When you’re an entrepreneur, the world is full of potential business partners. It’s incredibly easy to get caught up in the energy and ideas that can start flowing when creative folks get together and start talking business.

However, you need to take a big step back before you decide to enter into a business partnership with anyone. No matter how brilliant someone’s ideas, no matter how great their talents, your partnership can’t succeed if you’re mismatched.

Here are some of the questions you need to ask any potential partner (and yourself):

1. Should you even have a business partner?

Can you work well with someone? Some people genuinely function better solo or need a business partner who will remain “silent” in the business. If you’re a “lone wolf,” a partnership might not be for you.

2. What is your potential partner’s financial situation?

Unless you’re independently wealthy, don’t get involved with a business partner whose finances are a disaster (or one who won’t offer complete transparency about his or her financial situation). You’ll find yourself frustrated, at best — and in debt, at worst.

3. What is your potential partner’s level of commitment?

How much time do you expect your partner to participate in the business? Does your partner have the same vision? Do they have the time? What about financial commitment? If your goals aren’t aligned, the partnership won’t work out.

4. What else does your partner have going on in life?

If you and your potential partner are at vastly different stages in your lives, you may not be able to mesh your goals very well. For example, if your potential partner is about to get married and start a family, their business goals could change rather quickly. Look for a partner whose private life is relatively stable.

Starting a business partnership is a big undertaking. Once you’ve decided to take the plunge, you can talk to a business law attorney to make sure that the legal aspects of your partnership get off on the right foot.