Partnering with someone else to open a small business can be a brilliant move.They can help shoulder the responsibility and the liability.You can support each other, and you have someone to bounce ideas off that has just as much invested in the outcome as you do.It isn’t all always golden, however.If you do not go into a partnership with all the information, you could be in for an unpleasant experience, to say the least.What do you need to know before entering into a partnership?
Who Are You Dealing With?
Most times, partnerships formed with the intention of opening a small business are not made between strangers.There are questions that need to be asked, however, that may not be common knowledge even between friends and family.For example, what is the other person’s credit score?What is their net worth?What is their debt like?These things will come heavily in to play when it comes to splitting liabilities.
Regardless of what you both think, a handshake deal will not do it.You need a formal, written partnership contract.Do not try to write it yourself.Hire an attorney. It will be worth it.There are too many ins, outs, and loopholes in these types of contracts, and not only do you want to be sure you are protected, but you each need to know where you stand.
Nothing replaces good old fashioned due diligence.Just do it.Both parties should agree to background checks, and you will both have to turn in financial information if any sort of financing is to be used anyway.Give each other references, offer character letters, or whatever else seems appropriate based on the nature of the relationship.
Biz2Credit helps small businesses of all types, partnerships included, find the right small business financing for their needs.Our network of lenders is standing by, and all you have to do is go to Biz2Credit.com to get started.