Four tips for making New Jersey business partnerships work
With more than one decision-maker, disputes are not uncommon between partners, but there are things they can do to make their partnerships work.
When it comes to structuring their businesses, many people in New Jersey subscribe to the adage that two brains are better than one. Choosing to form partnerships offers business owners numerous benefits. With more than one person involved in the decision making, however, partnership disputes may arise, jeopardizing the relationship and the company’s bottom line. Although it may be a challenge, there are several things people can do to make their business partnerships work.
Create a partnership agreement
Just as personal relationships have their ups and downs, so do many business relationships. Having a partnership agreement in writing and signed by all the partners may help ensure they and the business are protected. These legal contracts should specify each partner’s ownership percentage, as well as a leadership hierarchy. This may help clearly define who will have the final say in the event of disagreements between partners. Partnership agreements should also include provisions for admitting new members into the partnership, buying out partners who wish to split ways and the termination of the partnership.
Make the relationship mutually beneficial
As is the case with many relationship types, business relationships tend to be most successful when both sides gain something from them. One of the advantages of partnerships is that they allow the owners to share the business’ profits. While each partner typically receives an equal share, they may choose to adjust the percentages based on factors including the amount of each partner’s initial investment or the work each partner is putting in.
Clearly define the expectations
A benefit of sharing ownership with their partners is people can also share the workload. Unless everyone is on the same page, however, things may get missed or tasks may be left unaccomplished. Further, situations could arise in which partners develop resentments toward each other. Regularly checking in with their partners and clearly expressing who is responsible for what may help people avoid some redundancies and partnership disputes.
It may seem like it goes without saying, but partners generally cannot work well together if they do not communicate with one another. Perhaps the easiest thing people can do to help their business partnerships work is to regularly communicate with their partners. This may help them keep up with each other, as well as any problems that may come up. In order to facilitate this, it may be a good idea to set up a recurring time and day.
Almost as important as the product or service they offer is the foundation that New Jersey partnerships are built on. When disputes arise between partners, it may affect the day-to-day operations of the business and ultimately lead to its dissolution. Working with an attorney may help people who are considering forming a partnership understand their options.