You have probably found a great opportunity to become a partner in an established business. With the operation already in place, you do not have to worry about the hassle of building the business yourself. Still, knowing that some business partnerships degenerate into disputes and legal action, you should be reasonably sure that joining with a company as a partner will not end in the same way.
You stand a better chance of avoiding partner conflict if you know what you are getting into. Business News Daily offers some suggestions for entrepreneurs who are about to step into the role of a business partner.
Do some background research
You want to be sure that your future partner is not a magnet for legal problems. A background check may tell you if your potential partner has any prior criminal convictions or had been the subject of lawsuits or a court judgment. Not all of these circumstances are necessarily the fault of your possible partner, but you should know if the person you will partner with seems to frequently invite legal trouble.
Talk to your potential partner
Consider discussing potential areas of conflict with your would-be partner before you formally enter into a partnership. Some questions that merit discussion include the following:
- Who is in overall charge of the business?
- Who makes decisions over specific areas of the business?
- What are the procedures for leaving the business?
- What are the contributions each partner makes to the business?
- What are procedures for resolving partner disputes?
You are more likely to feel good about your partnership if you know what your partner expects of you, how much skin you have in the game, and how to handle a disagreement if one comes up.
Talk to the employees
You may gain a crucial perspective of the business from its employees. While they might tell you that things are great, they could also inform you of issues that the current owner wants to keep under wraps. Even if the workers do not openly speak of problems, you may glean from their body language that something is wrong with the company. Upon further investigation of the business, you may decide a partnership is too risky and back out.