Your questions answered by an industry expert
Going into business with a friend or relative
I am going into business with a friend and my dad has warned me that partnerships often end in tears. Do you believe in this cliche and if you do what is your advice? Abbey, Burwood, NSW
It's not a cliche but a historical observation. I have seen best friends, and brothers and sisters all end up in tears over business partnerships.
However, I have seen great examples where they work. Start with a business plan so you both understand what lies ahead. Get a good lawyer and accountant to advise you of your obligations and crucial tasks to make it work. The lawyer can help draft a procedure if you want to break up the partnership or add new partners.
Think about what might happen in the future, such as one partner wants out, and you should have an exit strategy with an acceptable way to work out the value of the business, etc. Make sure all life partners of the business partners are on the same page. Even think about having a business coach or mentor, which you both work with to ensure the best results.
Best of luck with the business and the partnership but remember most relationships fail because of a lack of honesty and silly assumptions that prevail from the beginning, made worse by a failure to grow in maturity.
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