All throughout grade school, teachers asked us to “partner-up.” If you were anything like me, unless your best friend was also in the class, you spent at least a little time contemplating who would make the best partner. In grade school my criteria usually revolved around who had the coolest color of glitter pen and which classmate’s mom made the best cookies.
Unfortunately, these criteria aren’t very helpful in the business world. If you are looking to “partner-up” you could take a lesson from those grade school days and write down your own list of criteria before committing to a business partnership with another person.
Forming a partnership is serious business and a partner shouldn’t be taken on lightly. In a recent blog post on Forbes.com, Amanda Neville posited that business partnerships are more difficult than marriage. Think about the care you took (or plan to take) before entering into that partnership. A business partnership should be approached with the same amount of scrutiny and consideration.
While I send my clients home with a full page of questions before meeting with them about the details of any potential partnership agreements, I think there are three questions you absolutely MUST consider before filing any paperwork.
- What kind of business do you want to have in the long term? Here you get to think big picture, if everything works out perfectly, what do you and your partner see as being the ideal business? Each partner should develop her own ideas before discussing long term hopes together so you don’t influence each other during this discussion.
- How will you settle disputes? In the beginning, it is easy to think you will always agree about everything, but as anyone who has ever worked with a partner will tell you, this is never the case for long. You should talk in the beginning about how you will proceed when you don’t agree. Do all the partners need to agree to move forward? Will you see outside counsel when you disagree? From whom?
- What is each partner bringing to the table? Here it is important to talk about finances, expertise and work availability. The best partners are often people that have different skills and interests, because then your business doesn’t have to spend additional time and funds outsourcing critical tasks. Talk about what you see your role in the company being, how much you can contribute both financially and time-wise.
Discussing these points may seem uncomfortable at first, but they are necessary if you hope to build a partnership that won’t crumble at the first sign of trouble.