You and your friend have decided to become business partners, and you both have agreed to share the responsibility of managing your company equally. One of the many advantages of a successful business partnership is the ability to share costs and duties associated with running a company.
However, a business partnership could also come with possible problems. That’s why it is important to realistically examine potential risks that the two of you could face before you make the partnership official.
Problems that your partnership may encounter
The following are potential problems that could harm both the company and your relationship with your business partner:
- Forging ahead without a formal agreement is never a good idea. Before the two of you take on any potential work, take the time to establish a contract that spells out how you will run your business. Make sure to address how you will handle conflicts that may arise down the road.
- Entering into a partnership because you cannot afford to operate alone. Ideally, both partners should be able to equally contribute financially to get the business up and running.
- Expecting your relationship to last if the partnership fails. For a partnership to work, your friendship must come second to business. Being inflexible might lead to issues between the two of you and could potentially end your friendship.
- Neglecting to establish boundaries between business and friendship. If you allow personal issues to enter into the business, both your business and friendship may suffer.
- Failing to develop a plan for leaving. You need to have a well-defined strategy in place that permits either partner to leave at any time.
Establishing a partnership with your friend entails sharing decision-making responsibilities. That’s why you should seek advice and do your homework before signing on the dotted line.