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Business partnerships remain a fairly common business structure, however the majority fail within a 3 yr period.
Generally, partners enter a partnership too hastily without:
1) first establishing formal decision-making processes (i.e. how are decisions introduced, how are they voted, what decision require unanimous consent, how will decision-making authority be shared?)
2) defining the partnership’s vision and existence beyond money terms. (e.g. will work requirements be structured around family? will this partnership have to come first?) 3) creating a compensation system that incentivizes working together
4) factoring equity as a direct result of: financial contribution, commitment, and resources. After all, sweat equity is very hard to quantify
5-6) having an accounting system in place. Bookkeeping and proper record-keeping should be made a priority from the start in order to accurately gauge progress and help in decision-making
7) establishing systems for addressing different stages of growth (e.g. scalability of processes)
8) creating a partnership agreement detailing entry/exit clauses, responsibilities, operation, etc.
9) having discussed roles of family members (mostly not a good idea)
10) addressing problems as they present themselves
