Partnerships

A reader asked for my opinion on going into business as a partnership. I have not been part of a business partnership (except with my husband) but my feeling is that it's a great way to end a friendship.

Now I'm just assuming that the reader was considering doing business with a friend, which may not be correct, but my guess is that is usually the case with salon partnerships. Here are some of the pitfalls...

1. One of you feels like you are doing more work than the other
2. You don't agree on spending
3. One partner wants out - remaining partner needs to buy them out
4. One partner goes through a divorce and soon-t0-be ex wants a share of the business
5. Things don't go as well as you planned and you start finger-pointing
6. Things don't go as well as you planned and the partner with the deepest pockets is putting money in to keep things going
7. One partner doesn't follow the rules that apply to everyone else and it creates issues in the salon

You're not going to agree on everything. So when you disagree, how do you decide what to do? A partnership is like a marriage - it's not to be taken lightly. If you do decide to enter into a partnership make sure you:

1. Have a written agreement that covers each partner's responsibilities (financial responsibilities and work responsibilities)
2. Include in the agreement what will happen if one of you wants out of the partnership (Can you sell to anyone? Does remaining partner get right of first refusal? How do you value the business? How will payment be made?)

You really need to sit down together and talk through the absolute worst case scenarios and decide how you will handle them before you go into this. If you move forward, make time for regular (weekly?) partnership meetings so you are both full aware of what is going on in your business.