In this post, we shall look at THINGS TO CONSIDER BEFORE GOING INTO PARTNERSHIP BUSINESS. To accomplish this, we shall be looking at the following BELOW:
Before going into partnership business, it is important to consider the following points. So as to prevent any future problem that may hamper personal relationship between the partners or hamper the existence and growth of the business.
♦ Do I need a Business Partner: This is the first question you should ask yourself before deciding to go in search of a partner. If you think that you have all it takes to run your business alone, then going into partnership is not necessary. Partnership is good when it offers complementarity in capital, skill, connection and so on. Even at this, if you have the capital and required connection, you may just hire someone with the skill you seek as an employee.
♦ Who do I Need as a Partner: If for some reasons the answer to the first question is “YES”, then the second step is to answer this question. I will provide you with clue on how to answer this question. Firstly, it is very important that you have or establish a certain level of personal relationship with whoever you wish to enter into partnership business with. Also, ensure that there is good communication skills, mutual interest and vision between you and your potential partners. Partnership business may be started with friends, relatives, or strangers. Who ever it is or they may be, ensure that there is understanding between you and your partner(s).
♦ Business Plan: A good business plan is very important in determining the viability of any business. Partnership business inclusive. This business plan would clearly highlight the human, physical and financial requirements of the business. So, that the need and contribution of each partner is based on the plan. It also helps the partners in identifying the target market, the revenue projections as well as the cost projections.
♦ Partnership Agreement: It is accordingly usual for people entering into partnership to express their intention in a partnership agreement known as ” deep of partnership”. This can be in the form of express agreement, by law, or by estoppel. This document is drawn to clarify issues bothering capital contribution, sharing of profit and loss, responsibilities of the partners, admission of new partners, nature of business, objective of business, duration and dissolution of the business and so on.
These issues must be addressed to ensure healthy business and interpersonal relationship between the partners.