“A contract isn’t in place for when things go right.
It’s to account for the possibility that things might go wrong.”
You can google the title of this article and you’ll find hundreds, perhaps thousands, of articles, many of which take a position as to why you should “never” have a partner or “always” have a partner.
We’re not going to do that today, not only because we think such a binary answer to a question that involves humans, who are pretty complex in general, never mind when it comes to business, isn’t useful, but also because we really want you to step back and look at the larger issues in place when you consider a business partnership.
Have an agreement in place
Figure out how decisions are going to be made, who’s going to do what, what happens in the case of a death, a sale, or someone just getting tired of it all and wanting to quit. You’ll find that just the exercise of coming to an agreement as a valuable first proof of whether you should have a partnership…and whether you should have a partnership with this particular person.
What are your track records during tough personal situations?
If you aren’t well acquainted with a possible business partner, ask to speak to former employers and close friends and ask the tough questions. Difficulties are going to arise while running your business, and you need to know what’s going to happen to this person when the going gets tough. It’s easy to say, “I’ll hang in there,” but your past performance is your best indicator of future reactions.
Do you both feel equally strong about the business?
We know that sometimes in relationships one person feels stronger than the other. Try to avoid that here. You need to find someone who is enthusiastic about the business for their own reasons, not just because they get caught up in your excitement and get pulled along in your wake.
Are you friends already?
And are you willing to possibly sacrifice this friendship for this business? This is the non-business risk that you take when getting into a partnership with a friend. Things could end very badly, ending not just your partnership and business, but a friendship too. This obviously goes back in line with everything else we’ve discussed above.
Can you do this without each other?
Do you really need a partner? Or do you just need to hustle longer and harder? Sometimes people think they need a partner, but what they really need is to contemplate if they could do the business alone and calculate the possibilities.
Remember that anyone who tells you that you should “always” or “never” have business partners is going for an easy, oversimplified answer to a complicated question. The correct answer is…It depends, just as much on you as the potential partner.