Owning and operating a small business can be a much easier undertaking if you share the workload and responsibility with a business partner – but that lightening of the load can quickly devolve into a nightmare if you pick the wrong person.

How can you know if you’re making the right choice?

Here’s 4 things to consider:

You’ve known the person long enough for the honeymoon period to have worn off.

If you’ve just met someone who you think would be absolutely perfect to own a business with – tap the brakes. A business partnership is just like any long term relationship – the first bit is all happiness and roses, then after a time real life marches in and true personalities (and flaws) surface. You wouldn’t marry someone after only a handful of meetings, so don’t jump into a business partnership with someone you barely know. If the two of you really think business partnership would be possible in the future, embark on a much smaller project together and let some time pass. If small projects are a success and you are still good to go after a year or so, then perhaps you’ve found the right business partner for you.

You both bring different things to the table.

Two disorganized creative people are not going to be able to run a successful retail store, but one disorganized creative person can bring life to a retail concept while their organized and number-crunching business partner keeps everything on track. Really think about what your strengths and weaknesses are, then find someone who complements those strengths and weaknesses.

You don’t disagree about massive life things.

Just like the marriage of a deeply religious person and an outspoken atheist probably won’t last – you and your business partner need to share some core values if you’re going to be able to coexist in the same space for years on end. This is another reason why you need to spend some decent time together before you sign on any dotted lines. You might find out you have irreconcilable differences of opinion that will hinder any chance of a good partnership.

You’re both willing to enter a strong operating agreement.

Much like a prenup in a marriage, an operating agreement from day one will eliminate any contentious arguments down the road about who is responsible for what, who owns what percentage, what the exit strategy will be, and what your rights are as a partner. If the person you are considering for business partnership either won’t sign an agreement or won’t agree to what you want – they probably won’t be a good partner.

A great business partner can be a blessing, making your life easier by helping with the workload and by complementing what you bring to the table. The alternate possibility, however, is choosing someone who makes your life a living hell. Do some homework and let some time pass. Be just as diligent about choosing a business partner as you would be about choosing a business.

Are you considering buying a business with a partner? Would you like to know more about putting together a strong operating agreement? Ask us! Leave any questions or comments here and we would be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com