Business Partners: Steps to Take Before Choosing Your Next Partner
Having a partner in business is often compared to a marriage. It pays to take your time choosing your business partners wisely because you may be in a relationship with these people for a long time to come. Here are a few things to consider before taking on any partner in your organization:
• Do your due diligence
Get referrals about your potential partner from former business associates, clients, their social media accounts and Google. Read past the first page of any search engine. Know their enemies and friends. Don’t take their word for anything. Fully vet anyone who you are thinking of partnering with before you sign any document.
• Lawyer up
Every aspect of your business relationship with your business partners needs to be in writing. Every sentence should be looked at by an attorney. Have payment arrangement and accounts receivables reviewed by an accountant. Spend the money before your relationship to ensure that if anything happens, you are protected.
• Have an exit strategy
If you went into marriage with divorce on your mind, you’d probably wonder why you were doing it. Fact is, it’s not only divorce of a business partnership you have to worry about. What happens if one of the business partners dies? How will the assets be divided? Have a good agreement before you go into a partnership, but have a plan for losing a partner, too.
• Protect your personal assets
Either incorporate or become an LLC to shield your home, personal savings, car and other belongings from being associated with your business. You don’t want a lawsuit against a new partner to affect your assets.
• Protect your brand Merging with another business can be exciting, but know whether you want to keep your brand identity or create a new one. Have goals and strategies to prevent your identity from becoming something different.
Talk to the financial specialists with Muth Capital for lending opportunities to help your business grow and expand without giving up equity.
