Your business is expanding and growing. Throughout that process, you’ve made a number of connections in the local industry. Some are like-minded entrepreneurs. Now you’re thinking of adding one of them to your company, as a partner, not an employee. While you know this can be a beneficial move, you also know you don’t want to make any mistakes. What do you need to do?
Is it the right person?
First and foremost, make sure they’re a good fit. It’s about more than just skills or expertise. Is this someone you can work with every day? Do you share goals? Do you have the same vision for the company? Do your skills work well together to make the company stronger? Take the time to think this over carefully and do not just jump into it too quickly.
Will you need a partnership agreement?
The best way forward is to create a partnership agreement that both of you can sign. It can outline what roles you each have in the company, what percentages of it you own, how much money you earn, how you’ll make business decisions in the future, and much more. It can also dictate what steps you’ll need to take if there is a dispute or if one of you leaves.
Do you already have another partner?
If you started the business yourself, you can make this decision. If you have a partner already and are thinking of adding a third person, you must work together. Ideally, you and your initial partner should already have your own partnership agreement. It will tell you how to decide who to add, if you both need to agree, what to do if you have a difference of opinion, and the like. Since ownership percentages will be changing, you must be on the same page and agree legally on how the company’s ownership team is going to change.
You can already see that this is going to get complicated. It is wise to work with an experienced legal team to protect your company and set you all up for the best possible future.