What do you own that you would be willing to put on the line in…
Congratulations! You’ve decided to launch a new business! But, as you’ve likely already discovered, it’s no easy feat. In fact, most business owners find that getting their businesses started is near impossible without a little bit of help. This is why so many people decide to go into business partnerships. As the old saying goes, two heads are (often) better than one.
Who do you partner with?
This question, as you can imagine, is the first and most important one to answer when deciding to form a partnership. It must be noted that when starting a business, a friend or relative may not necessarily be the ideal choice for a partner. As the Wall Street Journal’s website makes clear, it’s wise to be cautious about running a business with someone who is already close to you. This is especially true if that person is your spouse.
“Working together puts an added strain on a relationship, and couples can quickly discover there is a little too much togetherness,” warns the site, “Those who succeed often have learned to set boundaries keep the business from dominating every aspect of their lives. For example, they may have agreed to leave the office at 5 p.m. and put all conversation about work on hold until after the kids are in bed.”
Who contributes what and what does everyone get in return?
Once you’ve decided on the partnership, it is then important to get down to business. You may be the best of friends or even a married couple, but it’s imperative that you determine what investments each partner plans on contributing to the business. You must also decide who will get what when it comes to the company’s profits.
“Profits of the partnership are divided between partners according to their contributions, seniority, type, or a combination of the above,” says Jean Murray on TheBalanceSMB.com, “Take 100 percent and divide it between all partners. The amount due to each partner is called a distributive share. Of course, partners will share the losses of the partnership in the same percentage.”
What is your official partnership agreement?
Get it all in writing. This is a point that needs to be highlighted because far too many entrepreneurs enter handshake agreements with their friends. As you can imagine, this can come back to hurt both the businesses and the relationships. Of course, there are many specific details left to be determined such as the business name and how and when to get your licenses and permits. But, as Murray insists, writing up an official partnership agreement is a step that should never be skipped.
“A partnership agreement sets out in writing all the processes and decisions that the partners have agreed to,” she explains, “It answers all the ‘what if’ questions that could come up in the life of a partnership.”
Once you’ve gotten the details of your partnership settled and your business if off and running, you’ll undoubtedly need some extra working capital to grow your enterprise. For information about how Synergy Merchants’ unique merchant cash advance program can help you, please don’t hesitate to call us at 1-877-718-2026 or email us at firstname.lastname@example.org.