Steps to Take Before Your Business Can Start Working with Partners
[This article was written by Emma Sturgis.]
As your business grows, you may consider getting a business partner. Maybe you want to work with like-minded people to expand your clientele or expand your market. Great companies are launched on partnerships, but it is also imperative to know that a bad partnership can destroy a great business. Therefore, as an entrepreneur, you need to consider some factors before joining efforts with a partner.
Here are things to do before joining forces with a potential business partner.
Conduct an Underground Search
Don’t be lured into a partnership by heavenly promises. When it comes to signing a contract, you better be sober and confident that you are about to get the right partner. Performing due diligence goes beyond asking for referrals about a partner from friends and family. To ensure your search is productive, reach out to former business partners, associates, employers, or inquire from the potential partner’s clients.
Contact a Lawyer
When entering into business deals, going by verbal contracts is wrong. When joining forces with a partner, every aspect of the relationship should be put down in writing. Some of the things do include in the contract are the partner’s duties, the mission, vision, and goals of the company, and the exit strategy. Get a lawyer from a firm, like carterwestlaw.com, to look at every sentence of the contract.
Develop an Exit Strategy
When entering into a partnership, ending the partnership is the last thing you could ever consider. It can be compared to thinking about divorce on your wedding day, but it is prudent to have a plan. The exit strategy should feature legal points such as sharing company assets in case of one of the partners’ death.
Protect Your Valuables
One of the smartest moves in business is separating your personal assets from those of your business. By doing so, you will be on the safe side in case of a lawsuit. You can become an LLC to protect personal savings, cars, and home.
Shield Your Brand
Entering into a partnership can drain your energy to the point of losing focus. Working towards the same goal as a team is fantastic, but combining efforts doesn’t necessarily mean losing your identity. You have to protect your original brand. Don’t focus all your energy and time on the new endeavor to the extent of making your original brand suffer.
When entering into a new partnership, the more precautions you take, the more productive it will be.