We recently held a coaching session with a small business that has been in business for about a year. It was started by two friends as equal partners. Each brought a different skill set to the table, and they seemed to be very complementary. The trouble arose when one partner had less time to devote to the new company and the other partner wanted to make the company grow.
Because they didn’t start with a written partnership agreement, they now have two very different memories of what they each agreed to do as well as some fundamental principles of the business. Worse, they have no provision for one buying the other out or one exiting the partnership gracefully. There is a potential here for not only the company to fail, but also for their long-standing friendship to be irreparably harmed.
Although it takes some time to hammer out the details when starting a business, it is worth every minute (and then some) to discuss each aspect, including an exit strategy, and commit it to writing before the business launches. A partnership agreement is absolutely necessary, no matter how small the business you are starting.
Starting a Business? Start Here. Go Far. LaunchX.com
