If you’re considering adding someone to your ownership team, you need to think carefully before you move forward. Ignore these myths when you’re thinking about bringing in a business partner.
Myth – You Don’t Need a Written Agreement.
Truth – Whether it’s a family member, friend or acquaintance, you need a written agreement that sets expectations and keeps you both on the same path. Ideally, you want to bring in legal advice, to make sure you’ve covered the details. Not only should you talk about what each person is bringing to the table, but you should also cover an exit strategy. What happens if someone wants out? What happens if one of you becomes incapacitated? No one wants to think about the partnership dissolving, but if you discuss it before it happens, you’ll be steps ahead if it ever does occur.
Myth – You don’t need professional advice.
Truth – Your legal team, insurance agents and CPA can be valuable resources to your business. When you’re adding a partner, you need even more advice. Each of you may want your own legal counsel to ensure that the partnership agreement is balanced. As you go forward, don’t forget to consult with the professionals on your team when you’re not sure of what you’re doing. Talk to your CPA about tax savings and accounting plans. Work up an agreement with your lawyers on who is responsible for which decisions. Use your insurance agents to manage risk.
Myth – Make decisions quickly.
Truth – Simple decisions can be made quickly. Decisions that are more long-term should be made carefully. Don’t rush through the decision-making process when taking on a partner. You’ll both be liable for those decisions, whether good or bad.
Integrity Financial Capital has funding options that can help you avoid giving up equity and to take your business to the next level. Contact us for more information.