Partnering with a friend? Why you still need things in writing

Are you starting a business with a friend or former office mate? Partnering with someone you know can be a great way to launch a business, but mixing business with family and friends can also be tricky. Here’s what you need to know to protect the business from potential landmines down the road.

When partnering with a longtime friend, colleague, or family member, you may be tempted to seal the deal with a handshake or over drinks. After all, if you’ve known each other for years and you both clearly want your business to succeed, what’s the point of wasting time with all the formalities and paperwork?

Problem is—issues are bound to arise in any business arrangement. Maybe you’ll disagree over how to spend your marketing budget; maybe your partner’s personal situation will change and he or she will need to return to an office job. If you haven’t agreed upfront to how some of these important decisions will be made, you can end up in a very difficult position.

 

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