One of the most common mistakes that people make when going into business with their close friends or relatives is not having a partnership agreement in writing. They feel that they trust each other, and they don't want to suggest that they doubt each other by enter into any written agreements. This leads to all kinds of disputes all too often. Ironically, these disputes tend to be far nastier than similar disputes between partners who otherwise didn't have a close personal relationship. Since the expectations from friends and relatives are higher and involve more personal emotions, any type of dispute becomes more personal and tend to feel not just like a business issue but also like some sort of betrayal by someone who you are so close with.
Therefore, you must have a written business agreement in place with your business partner/s no matter who they are, and no matter how long you have known each other. When you suggest signing an agreement, which you absolutely should, there should be no reason for you to be embarrassed of it, and there should be no reason for other partners to be offended by it. All the partners should understand that the reason that you are signing the agreement is not because you don't trust each other, but because each one of you wants to be clear about your respective rights, obligations, and expectations. The primary purpose of your agreement is not to prevent you from deceiving each other (that can never be 100% prevent) but to avoid any misunderstanding and ambiguities about the rights and obligations of each partners. The more specifically you outline what each partner must do and what he is entitled to, the more clear you will be about your partnership, and the less likely you are to have any type of disagreement due to not being on the same page, or due to simply not remembering what you agreed upon when you started working together. Comments are closed.
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