{"id":204172,"date":"2021-03-24T13:00:10","date_gmt":"2021-03-24T00:00:10","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=204172"},"modified":"2021-03-30T17:39:03","modified_gmt":"2021-03-30T04:39:03","slug":"going-into-business-with-a-partner","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/business-structures\/going-into-business-with-a-partner\/","title":{"rendered":"3 Things to Consider Before Going Into Business With a Partner"},"content":{"rendered":"

It is a big decision to go into <\/span>business with a partner<\/span><\/a>. No matter how much you might like the other person or how confident the two of you might be in your shared skills and vision for a business, you need to weigh up the risks objectively. Growing a business from the start is challenging. Likewise, the process will throw a range of obstacles and stresses at you. Ensure you are going into business with a partner who can weather both the good and bad times. This article covers three things you should think about when going into business with a possible partner.\u00a0<\/span><\/p>\n

How Well Do You Know Your Potential Partner?<\/span><\/h2>\n

Before entering a business partnership, try to understand the character and personality of your partner in some detail. There is no guaranteed period of how long you have to have known someone to get that deeper understanding. Still, it does help understand how the other person behaves at work, in leadership, and in particular through difficult or stressful situations. This can be easier to understand if, for instance, you have worked with them previously.\u00a0<\/span><\/p>\n

You should also try to understand what your potential partner offers relative to your own personality and skillset. Try to visualise what the combination of your leadership styles might look like. It is often preferable if a partner has a different skill set or experiences than you and may be better than you at certain roles or tasks. This differentiation can make it easier to set out your various roles and also maximise the all-round strength of your partnership.\u00a0<\/span><\/p>\n

Are You on the Same Page in Terms of Operating the Business?<\/span><\/h2>\n

While it may seem obvious, many partners go into business with surprisingly different ideas about how the business will operate and their various roles. Forming these assumptions without properly communicating with your potential partner can lead to <\/span>challenges down the road<\/span><\/a>. You should not assume anything about how your partner feels about important decisions like how you will divide profits. An equal split of profits may appeal in theory. However, this may not seem fair if one partner contributes more time or resources to the business over time. You should decide on these roles and distributions in advance. Likewise, write them down so both parties can see what they have agreed to.<\/span><\/p>\n

There are other essential elements you should both agree on. <\/span><\/p>\n

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For example:<\/span><\/p>\n