If you are looking to go into business with a partner, you will likely want to make sure that you come to some common agreements before you get started. You don’t want to go into the full-blown operation of your business without having a few things discussed ahead of time.
If you want to minimize surprises and misunderstandings down the road, you will want to make sure that you talk about some of the basic policies that will help to govern your day to day business endeavors.
If you plan to go into business with someone that is a good friend of yours, you will want to make sure that you talk to a mentor to ensure that you work out things ahead of time in order to make sure that there is no damage done to the friendship in the event that something were to go awry with the business down the road. The mentor can also help to facilitate planning your partnership.
First, you will want to talk about the purchasing and financial decisions of the business. For instance, you will want to see if the partner will either buy or lease business equipment or if they will use a line of credit to get the equipment. Also, you will want to make sure that you can agree when it comes to offering discounts to your clients. What will you do if you run into a disagreement? Will there be a voting process? How will you be able to work through issues that may arise? These are all important things to consider before you get involved in a partnership.
As you set up your business bank accounts, you will want to make sure that there are clear limitations. Some partnerships will require that checks over a certain amount have more than one signature. If you use online banking, then you will want to make sure that there are certain restrictions when it comes to who can log in to view the information.
You also want to make sure that you agree on who will handle accounting, payroll, bills, and taxes. Assigning one partner to do this can sometimes be risky. All partners should be in on it to ensure that everything is done correctly and documented correctly. After all, financial liability will fall on all partners involved.
Another area that you must consider is credit cards and other leases. While these may seem like obligations of the company, you need to read the fine print. It may not be the case at all. You may find yourself personally liable for these bills.
The best way to ensure that your liability is limited is to read all of the fine print. If you find that you don’t understand something fully, it is best that you ask questions before you sign.
Finally, you will also want to make sure that you consider all of the downsides of the partnership as well. While it may be easy to consider the upsides, you also want to make sure that you realize that things can go wrong. Talk to a business attorney to help minimize your risks when going into a partnership.