The wrong choice of business partners is one of the causes of more failures, frustrations and disappointments. Many good businesses go bankrupt for failing at this point.
And it is the same when the partners are friends, colleagues, college mates, parents and children, wives and wives, brothers or close relatives. Needless to say when it comes to individuals.
Just yesterday, a friend from Santiago wrote and told us: “I'm frustrated, I've been coming with this project for months and now I realize that my partner was only using me. If I don't take care of myself, I even lose my gait ”.
For something we have included in the list of the 30 worst mistakes of the entrepreneur the poor choice of partners.
And I have clarified in the conferences that the error is not "having business partners", the error is "choosing wrong business partners".
There are many issues that are not discussed before making the final decision to have a partner in your business project or to participate as a partner in the project of another.
In a previous note I recommended that you choose a limited liability company when the partnership will be made up of a small number of partners and there is no intention of attracting investment partners in the future.
Today I want to recommend an activity that is necessary and prior to legally establishing itself as a company. These are the first formal conversations you should have before deciding whether you will be a business partner.
As I said before, these cares apply to all types of partners:
the partners are friends, the partners are colleagues or university colleagues
the partners are close relatives: parents with children, spouses, siblings, etc.
the partners are private.
They are the "hot topics" that I talk about in the 30 Errors Conferences. " Here's a quick guide, to get started:
“ Sit down with the partners and discuss all the details that you think have to do with the various possibilities that will arise when the partnership is operating. Speak up, even the uncomfortable topics, and build a "partner agreement."
This is a bit like when the couple, before getting married, talk about their plans for the future: where they are going to live, how many children they plan to have, when they plan to have the first child, what they are going to invest in, work-related issues of each, family relationships, friends, etc.
Business partners are literally "getting married"; but a business area.
So there are issues that need to be discussed.
What to talk about? There is a lot and it is not always easy. Sometimes I have been hired to witness this and to serve as a referee. I offer you some topics:
How and when will the profits be distributed?
How will losses be paid if they happen or if the company goes bankrupt?
How much does each partner contribute?
How are contributions that are not in money valued?
How are salaries paid to working partners?
What happens when a partner wants to leave the company? How do you calculate what is returned to you?
What happens if today the partners are husbands and they get divorced?
What happens when the children grow up and want a job in the company?
These are just a few examples to start with. They must define the rules of the game before starting. You have played board games, you always read the "rules of the game" instructions first.
It is the same with business.
This information is really useful for you as entrepreneurs and future businessmen. Use each of the articles that we are writing on this delicate subject.
Remember to write your comments and I would love for you to share the experiences you have had on this topic.
