Know What To Look for in a Partner for a New Business

[Small to Feds]

A willingness to work with you on an operating agreement and ultimately sign it.

An operating agreement should be a simple, straightforward document you and your prospective partner(s) can draft yourselves, addressing such matters as % of ownership, how revenue will be distributed and other general matters, as well as who can commit the company in the form of credit cards, who signs checks on the company account and other administrative matters.

Buying out a partner should also be covered as well as adding new members if the need arises down the road.

I have seen many enterprises fail or go through terrifically hard times due to lack of an operating agreement. The parties should sign it after a review by a lawyer. It should then be notarized and made an official part of the company file.

You can download a generic operating agreement at the Box Net “References” file in the right margin of the site linked below:

http://www.smalltofeds.com

You can feel free to borrow from the sample or supplement it as you see fit. It is fairly comprehensive in order to cover most business situations and there may be elements of the example you feel are not necessary.

 

[Zachary Kirkland]

That is a great post Ken, no one could of said it any better. The flow of workload at a company is its life essence, if there is disagreements at the top of the chain on what is supposed to happen. How can they expect their company to operate smoothly as well? Thank you for the great post and I look forward to reading more of them!

 

[Charu]

Interesting. Yes, operating agreements are very much in need for this but along with this I believe that knowing about working experience of your business partner is also important.

 

[Small to Feds]

Interesting. Yes, operating agreements are very much in need for this but along with this I believe that knowing about working experience of your business partner is also important.

No better way to find out a prospective partner's experience than by generating a business plan and an operating agreement with them.

 

[Daniel Jameson]

Choosing the person who will help you start and run a business isn’t as simple as selecting a friend. It’s a smart move to think carefully before you make this decision. Some of the essential points you have to know while choosing the right business partner first is find someone reliable and second is Find someone that challenges you.