How to Start a Business with a Partner
It is impossible to overstate how carefully one must approach starting a business with a business partner. First and foremost, there must be open and honest communication about each person’s vision for the business, goals and exit strategy, roles, abilities and limitations, and there must be appropriate documentation prepared setting out what the business relationship will look like. This documentation usually takes the form of a shareholders’, operating, or partnership agreement. The Wall Street Journal also prepared an insightful piece on the topic that is worth reading:
“Business partners often start businesses together with little planning and few ground rules. Sooner or later, they discover the hard way that what’s left unsaid or unplanned often leads to unmet expectations, anger and frustration. Partners can clash over countless things, including conflicting work ethics and financial goals, roles in the business and leadership styles. What follows is a primer on how to avoid that and set up — and sustain — a business partnership.
First, ask yourself: Do I really need a business partner to build a successful company? Taking on business partners should be reserved for when a partnership is critical to success — say, when the prospective partner has financial resources, connections or vital skills you lack. You may be better off hiring the other person as an employee or an independent contractor.
Communication is important at every stage of a partnership, and especially so at the outset. A common mistake business partners make is jumping into business before really getting to know each other. You must be able to connect to feel comfortable expressing your opinions, ideas and expectations.” read more here.
This blog post is not intended to consist of legal advice and you should always consult with a lawyer before acting on anything you find on the Internet. If you have questions or comments about this post, about the topic, or if you need legal assistance, you should feel free to give us a call or send us an email. Let us know how a Brooklyn business partnership lawyer can assist you.