Ask a Business Expert

A: It is exactly because you are such good friends that a Partnership Agreement is a very wise move. And not just any partnership agreement. I advise all clients who are planning to go into business with someone they know and care about to protect that positive relationship by taking the following steps: First, each of you should privately write down the name of someone whom you absolutely do not trust. This person should be someone who would steal your teeth right out of your mouth, by hook or by crook, if they could. Or someone who is a master at twisting your meaning. Or someone who knows how to push all your emotional buttons to get his/her own way. Second, once you each have identified someone you absolutely DO NOT trust, then work with a lawyer to write an agreement which would protect you from such a person! Why? Because this approach will give you objective steps for resolving differences before such differences arise, before you know which side of any disagreement either of you will be on. Will you have the business appraised each year, for example, so that should one of you need to leave and the other want to stay, a mechanism is already in place for determining a buyout price. Or suppose one of you eventually decides to launch out on your own. Will you know from Day One who then owns the customer database, the one who's keeping the business or the one who called all those people to begin with? Following this plan of partnering with your "enemy" will help you keep your friend!