How to prepare for a successful small business partnership including the Business Partnership Checklist. Henry Lopez, serial entrepreneur and host of The How of Business podcast, shares his experiences and tips for a successful partnership.

This episode is about preparing for a successful Small Business Partnership. If you are considering going into a business partnership, where you and one or more people are going to own and be involved in your business, then this episode is for you.

[LEGAL DISCLAIMER: Henry Lopez is not an attorney, and David Siegel and Christy is not sharing specific legal guidance. Please be sure to seek your own legal guidance from your attorney before taking action on anything shared in this episode. Read our full Disclaimer.]

Business Partnerships can be extremely powerful and successful, but they can also create problems you may not even be thinking about right now. Problems, issues, and misunderstandings that can ruin your business! The key to potentially avoiding any issues with your business partnership is to discuss all the possible scenarios and situations upfront, and then executing a comprehensive legal agreement that spells out the terms of the partnership.

Join Henry Lopez for the next Business Partnerships Workshop – learn more and register.

How to Prepare for Successful Small Business Partnership:

• Download the Business Partnership Checklist to help you discuss and address the critical terms of your small business partnership.
• Have those perhaps difficult conversations up-front, before you start the business, to help avoid conflicts and misunderstandings later.
• The pillars of a successful business partnership include Trust, Respects, Alignment, and Communication.
• You must hire an attorney to draft and execute a legal partnership agreement.
• Exit Strategy – are you and your business partners in alignment about your potential exit strategy? You exit strategy includes your potential plans to own the business long term, pass it on to your children, or sell it at some point in the future.
• Additional Capital Investments – how will you handle potential future needs for additional cash invested in the business?
• Sweat Equity – will one or more of your partners own equity in the business through their efforts and other contributions that don’t include capital?
• 50/50 Partnerships – equal partnerships between two partners can often lead to significant issues that can negatively impact your small business and your relationships.
• Economic Interest Only – will some partners play the roles of investors only with no say on the day-to-day operations of the business?
• Roles & Responsibilities: As partners, it’s important to clearly delineate who will play what roles in the business. It’s certainly possible to be co-founders and CEOs, but it helps to further define the areas of the business that each of the partners will be responsible for.
• Dispute Resolution: If a dispute or serious conflict does occur between partners, how will you potentially resolve them? Perhaps incorporating a mediation or arbitration clause in your partnership agreement may
• Buy-Sell Agreement: What if you or your partners want to get out of the partnership? What are the rules related to how this can happen?

Resources:

• FREE DOWNLOAD: Business Partnership Checklist
• FREE DOWNLOAD: 3 Pillars of Successful Partnerships

Other Related Podcast Episodes:

Business Partnership Episodes

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