Starting off a new business can be a daunting prospect so rather than trying to do it all by yourself, it might make sense to get yourself involved in some kind of partnership. This helps to divide out all of the responsibilities involved with creating a business in the first place and watching it grow over the coming years. The downside of a partnership is that decisions need to be made jointly and so this results in business conflicts and damaged relationships.
The first thing that you have to establish is who owns what and who has put capital into the business and how much. As a business begins to grow, this changes over time and so in order to be able to keep tabs on it, it’s a good idea to invest in a cap table for startups. This allows everyone to know exactly where they stand with regards to equity within the business. The following are some other top tips to protect yourself when part of a business partnership here in the USA.
- Pick your partner wisely – Picking an individual to go into business with can be extremely difficult and many people say that you should not include family and money together. This is pretty sound advice, so try to find an individual who has the same vision as you, who has the same goals and who has the necessary skills and know-how to add something to the overall business plan.
- Draw up an agreement – It is important that everyone knows where they stand from the very beginning and so drawing up a partnership agreement lets each individual know what their rights are within the business and what their responsibilities are. This is why investing in a cap table makes so much sense because it lays out the ownership structure and the profits due.
- Be sure to protect your IP – If you are unfamiliar with what this is then you should know that it is your intellectual property rights. These are the very things that make you stand out from your competitors and so you need to do all that you can to protect things like your ideas, your business logo, the name of the business itself and any other innovations.
Follow these three pieces of advice and there’s no reason why your partnership shouldn’t be a complete success.
