Do you have a new business idea drafted together with another entrepreneur? Do you consider a business partnership to grow your company? Take these steps before committing to the new business relationship.
Analyze why you want a partnership
The final aim of two entrepreneurs coming together is a healthy and sustainable bottom line. However, there are other ways of reaching that. Before signing a partnership agreement, make sure that you know exactly why you want it.
- Analyze your business needs and assets, and how the new partnership can respond to those.
- Decide on the vision of the business partnership, more precisely on your common long-term growth goals.
- Develop the strategic planning of your partnership.
Learn everything about your future business partner
If the new business partner is not that friend that you know or work together for a long time, you should do some research:
- Run some background check, and ask for some references of previous work and business results.
- Check the partner’s online presence, such as on social media.
- Initiate discussions to understand business values and personal goals.
Choose a name for your business
You may decide to use the name of the partners or choose something more descriptive for the business. Once you select two-three options, check the availability for them or any similar existing names that could create confusion or image problems. Make your final decision and register the name!
Develop the written partnership agreement
Communicate and talk about your expectations, but also about potential future obstacles. Draft a comprehensive partnership agreement, which should also include an exit strategy. You may want to consult an attorney to ensure that:
- the partnership agreement covers all the legal bases,
- you both fully understand what you agree to;
- the document is properly composed, together with the articles of incorporation.