Partnership–Is it worth it?

   I  recently visited with an individual that had just ended a partnership relationship with other individuals in a technology business.  Unfortunately, the business was begun just before the economic downturn in 2008.  The business plan was based on data prior to 2008 for the specific industry.  However, the economic downturn of 2008 caused the business to decrease significantly, in the end, loosing substantial amounts of money invested by all of the partners.
   Partnerships are risky and tricky.  This is especially true if you enter into such an agreement with individuals that you may not know real well.  Ethics, financial management, personnel management, purchasing ideas along with an infinite number of other challenges all need to be carefully addressed BEFORE you even contemplate a business partnership.  This is an area where you need a business consultant along with a good business lawyer.  The consultant can help you draft the corpus of a partnership agreement.  The lawyer can take the draft agreement and “turn it into legalese” for you.
    Partnership agreements are vital.  There has to be a majority partner and then at least one, if not more, minority partners.  You cannot have an effective 50-50% partnership– one of the partners must be the majority partner and be able to “call the shots” if that is required.
    Fiscal and fudicary duties and responsibilities must be carefully delineated in any partnership agreement.  If this action is not done, you will experience extreme difficulty if the partnership requires additional funding or the need for additional capital.
    The partnership program is not for the “faint of heart.”  Many strong and long term friendships and relationships have been inextricably ruined because of poor partnership planning and agreements.
    Think hard about becoming a partner with anyone.  Being a partner is NOT all that it is cracked up to be!