You’re starting a business and you realize that you need a partner. You may even have someone in mind. While there are many benefits of forming a partnership, it could end in disaster if you don’t take the right steps upfront.
Here are some of the many mistakes you need to avoid when choosing a business partner:
- Jumping the gun: Don’t assume that someone would make a good business partner just because you have an established personal relationship with them. There’s a big difference between getting along with someone in your personal life and working with them every day to grow a business.
- Ignoring the test period: Rather than formalize your agreement right away, go through a test period during which you get a better idea for how the other person works. If everything goes well, you’re ready to proceed. But if you face one issue after the next, it may be time to reconsider.
- Forgoing the contract: Even if you’re comfortable placing 100% of your trust in this person, you should still create a contract that protects the two of you. Also, by outlining the terms and conditions of your partnership, you’ll both have a clear idea of what you should and shouldn’t do.
With high hopes for your business, it’s critical that you choose the right business partner. Should you make a mistake here, it could impact your ability to see your business through to its full potential.
If you want to go into business with a partner, create a contract so there’s no gray area in your professional relationship.