You have decided that you want to work with a business partner, as you think it will make your business much stronger. But you’re also concerned that it’s going to lead to disputes or conflicts. You won’t have full control over everything, so this is a possibility.
Fortunately, there are some steps you can take in advance to reduce the odds of these disputes. One of the most important things to do is to draft a business partnership agreement. Here are a few areas to address when doing so.
What roles do you each have?
Is one person going to be in charge of product development while the other does marketing or makes personnel decisions? Are you going to have official titles like CEO and CFO? What specific duties will each of you be required to perform?
How will you get paid?
Are both of you going to have a set salary that you make regardless of the total revenue of the business? Or are you just going to split up the earnings as they come in? How should these payments be disbursed, and when will those distributions be made?
How do you make key decisions?
Many partnership disputes happen when partners can’t compromise or agree on who gets to make specific decisions. How do you decide if you’re going to go public? How do you choose a new business partner to add to the team? Who makes decisions about mergers and acquisitions?
All of these questions just give you the basis to begin working on your partnership agreement. Be sure you know what legal steps to take while creating your new business.