In most of my writings here in the Home Biz blog, I assume that the average home business owner is in business for themselves-working and operating alone. But, in fact, partnerships are another popular way that individuals start and operate home businesses. Or, your business may grow in such a way that the need to expand and take on additional help arises and you may wonder if you should consider taking on a business partner.
As someone who has worked in a business partnership before, I do have some suggestions on questions to ask and things to mull over in deciding if a business partnership is right for you…
In some ways, businesses partnerships are like other partnerships–marriage, for example. You’ll want someone with whom you are compatible and definitely someone you can trust. My business partner was the only person, other than my ex-spouse, with whom I ever shared a bank account. That involved a great deal of trust and negotiation. By compatible, it probably won’t be someone who is “just like you”–in fact, one of the benefits of taking on a partner is that you can cover more bases if the two of you have different strengths and expertise. It actually helps if you can compliment each other, while having appreciation for the other’s work style and personality. Even if the two of you will not be working in the same space, you’ll want to present a united front to the world, so you’ll need to be on the same page.
I think it is important to set as much a you can down in writing prior to beginning the partnership–even draw up job descriptions for each person so things will be very, very clear. Draw up a business plan for your partnership, even if you already have one for your business, come up with a new projection and guidelines for the partnership arrangement.
When my business partner and I were structuring our business, we made use of our local Small Business Center at our community college. We were able to meet for a couple free consultations with a business person who mentored us in where to apply for a business license, how to structure our finances and fee structures, what laws applied to us, etc. It was incredibly helpful and it helped us get our business from an “idea” to the actuality stage.
If I had to give one morsel of advice, I would say to take you time, talk though possible conflicts and expectations, and choose someone with whom you can be friends as well as a business associate with. In running a small business, you’ll need to have appreciation for each other’s families, other obligations and responsibilities, as well as working style–so it’s important to form partnerships with people you genuinely respect and appreciate.