Texas Business Lawyer

So You've Agreed to Start a Business with a Partner. Now What?

You and a colleague have come up with an idea for a business. You're sure it's going to work, as you don't see anything quite like it on the marketplace. You have some money saved, you're tired of your boss and you're ready to take the plunge - now is when it gets interesting. The idea and the excitement that follows are quite normal, but the majority of businesses fail before they even get started, and that can be traced to a lack of preparation before getting it moving. Below are a few suggestions regarding how to prepare for a partnership.

Put Everything in Writing

Even if your partner is someone you trust completely, you never know what will arise in the future, and the biggest stress on any partnership is ambiguity. Starting a business involves enough stress, so any disagreement or problem can be exacerbated when there is no governing principle guiding your procedure. When you reduce the partnership to writing, make sure to include everything you think of, no matter how far-fetched or unrealistic it may seem. It's better to have too much documentation than not enough.

Decide on the Money

You've probably already agreed on the amount of investment that's going to come from each of you, but that's only the beginning. You both have bills to pay, both personal and business-related. Make sure you plot out how much money each of you is going to draw from the business going forward, and don't ignore anything that you think you can handle quietly. Again, the point is to be totally prepared, regardless of circumstances. Removing confusion regarding who is withdrawing what amount will substantially minimize the chance for a heated disagreement.

Define Your Roles Clearly

It may seem quite clear what each of you brings to the table regarding skill sets. However, there are always "gray areas" that arise when running any business, which means that when something does happen, you both need to know who's going to handle what. Otherwise, you may face the prospect of both of you doing the same work or neither of you handling an important issue, which again leads to a potentially heated situation.

Overall

Of course, the ideas above are far from an exhaustive list of action items. If you would like to gain a full perspective of how to properly get a business started, contact the Texas business lawyer firm of Slater Kennon & Jameson, L.L.P. for an initial consultation.