Most of us like to think that we can tell when we’re interacting with people who are smart, creative, and of good moral character. However, just enjoying someone else’s company doesn’t always mean that you might work well together.
Experienced entrepreneurs often advise newcomers to never form a company with someone you haven’t already worked with on either a major or minor project. You need to see if your business styles match and if you have the special “give-and-take” required to meet various crises in a calm manner. If you fail to do this, don’t be surprised if things unravel rather quickly.
Here are some of the key issues that you and your partners must see “eye-to-eye” on if you hope to stick together and enjoy long-term success.
Key Ways to Know if You’re Meant to Be Another Person’s Business Partner
You share a common vision for the company and how to get things going. Be sure that each of you fully understand the aspects of your business that are critical to attracting the capital you’ll need and the creative and savvy workers you’ll want to employ;
You must each be prepared to make hard money decisions from the start. In other words, you’re each ready to forego higher initial salaries while conducting market research and hiring the best possible staff for your company;
You know how to share power and can even allow one of you to be the final decision maker. Choosing good business partners is a bit like finding the right person to marry. There has to be plenty of respectful “give and take.” However, when push comes to shove, you must agree that one of you has the authority to make certain final business decisions in some areas – while others will make them in regards to other key issues;
You are each fully committed to the business -- or at least accept one another’s level of commitment. Few things are lonelier than discovering that one or more of your partners still consider their “day jobs” the central focus of their lives when you need their input. If you cannot commit to being fully available to one another when decisions must be made, at least make provisions in your written agreements which allow one or two partners to make binding decisions for the others;
You understand that companies need diverse types of experts. In other words, you’re going to need those who are good at the “vision thing,” while others must be able to properly address financial, technological, and human resources quandaries;
You’re prepared to discuss staffing priorities at an early stage. Be ready to hire the people you’ll need when you need them. Decide ahead of time which partners will handle all of the initial hiring tasks;
You will need similar management styles. If you and most of your partners tend to procrastinate or try to get others to handle the hardest tasks – think twice about starting a company together. You’re going to need people who are willing to create rules and stick to them – while others concentrate on creating new products lines and services;
Make sure your business plans provide for partners to leave as necessary. Although everyone would like to believe that their new business will always exist with the same partners, it’s much more realistic to clearly spell out in your partnership agreement how remaining partners can buy out the shares of those who choose to leave (or are asked to depart);
Agree in advance how major disagreements will be handled.Many partnership agreements include a clause that states that if major issues cannot be resolved between the partners, they must be submitted to binding arbitration;
- Dissolution plans. Finally, try to create a general plan for how the business will wind-down all of its affairs if it begins to fail – or if everyone agrees to dissolve the partnership. This type of planning can prevent a lot of costly and unnecessary litigation.
If you and your potential partners can agree upon all of these types of issues, odds are, you’re going to work quite well together.
To obtain help with handling all of your Georgia business planning needs, please contact the Law Offices of Shane Smith today. You can schedule your free initial consultation with a knowledgeable Peachtree City estate planning attorney by calling: (770) 487-8999.
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