If you are thinking about taking on a business partner, it is important to think long and hard about who that might be. Even if you already have someone in mind, it’s important to play out possible scenarios in your head.
Here are some questions to ask yourself before you make any decisions:
What gap will they fill?
Why is it that you want a business partner? What gaps will they fill? It might be financial or it could be knowledge, skills or contacts. You should always consider whether there is another way to fill the gap. Often, there is, such as learning to do something yourself or hiring someone on a freelance basis.
What will you sacrifice in return?
Being a business owner brings a lot of responsibility, but it also brings a lot of freedom. That’s one of the main reasons people set up alone, because they are fed up of having to answer to others. Yet, if you take on a business partner, that will reduce this freedom, as you’ll have to consult with them on certain things and bear a responsibility toward them.
What sorts of problems could you see occurring
You should not expect everything to always run smoothly in a partnership. Try and picture what problems are most likely to occur and then think about how you would resolve them. Considering this now allows you to put measures in place in the contract. For example, if you can see yourself or your partner getting bored in a few years, include a clause stating whether the other partner would get first buyout rights and how the price would be set.
A partnership contract will be so important to your relationship, so legal guidance can be indispensable when making it.