It is so exciting! “We have decided to go into business together.” Are you sure? Are you really, really sure that that is what you want to do? My advice is that if you want to form a business partnership, no matter what kind of business structure you choose, that you and your proposed partner go on a long road trip together (one on one) and see how you get along with each other.
It is like getting married. Somehow, no matter how long you date your intended spouse, you do not really know what they are like until after you tie the knot and move in together for a while. It does not take long either. You will finally figure out what their weaknesses and idiosyncrasies are and they will drive you crazy. If you have ever been married, you understand what I am saying. Don’t get me wrong, I am married and have been for over 30 years but there are some things about me that my wife did not find out until after we married and set up house.
I went into business once with a friend of mine that I had known for many years. We had gone on some group vacations together, but I never really got to know what he was like until after I plunked down a bunch of money and “bought” in to his business. I had looked at the books. I interviewed the employees and the bookkeeper. I talked to some of the suppliers and past customers. He was not perfect but I knew that I could make a few “minor” changes and we could make sales take off like never before. I knew how to hold down expenses and control most of the aspects of the business, except him. He stiffened up his back, bowed his neck and would not budge on several very important aspects of turning the business around. He had my money and he was not about to change. It was very frustrating and I was stuck. Our relationship began to deteriorate. Some of the employees and others I had spoken to said things like, “I told you how he was.” or “I tried to warn you.” Oh really, I did not remember any of their so called warnings or innuendos. All I could do was to try my best. In the end, we parted ways. I lost a friend and a lot of money. Not a happy ending!
All of this is not to say that it is impossible to be in a partnership with someone. There are many people who go into business with others and things work out famously but, the odds are against it. I have known too many failures when two people go in as “equal partners”. Someone has to be the driver. Someone has to pull the vision together. Someone has to lead out in the overall effort. They have to somehow figure out how to make it work.
If you cannot go on a long drive with your intended partner, find as many ways as you can to figure out if the two of you can get along in a business situation. It will save you a lot of grief in the long run. Good luck.