Archives for posts with tag: starting a business

So you want to start a business, but you don’t want to go it alone. A partner might be a good way to split the work, risk and profits from a new venture, but working with others (even people you know and trust) can be a dicey proposition. Many a friendship has been destroyed over sharing a business; even families can be damaged through partnership efforts in the workplace. So how can you share your business with your potential partner and not become a victim of the many pitfalls involved?

The Wall Street Journal’s how-to guide for starting a business suggests that, before you go in with a partner, be VERY sure you want or need a partner in the first place. You should only partner up with someone when the partnership is vital to the success of the endeavor. If you’re leery about the partnership, you can possibly hire the other person or even ask them to do contract work for you; that way, you can still benefit from their expertise without worrying about splitting the business in half.

If you really want to create a partnership for your new business, the number one thing to keep in mind is communication. Partners MUST communicate and be comfortable enough with each other to talk about whatever might come up. The experts at eHow suggest you sit down with your potential partner and hash out your roles, strengths, responsibilities, etc. BEFORE you get started. Recognize your own weaknesses and admit to them. If, for example, you’re not so good with creativity but you balance a mean budget, stick to the money duties and let your partner handle the ideas.

Before taking on a whole new business, you might want to try a smaller project with your partner to see how well you work together. Can you focus on common goals and compromise when needed? Can you overcome obstacles together without assigning blame or pointing fingers? If you can successfully complete a smaller business project together, then you might be ready to try a full partnership together.

Don’t forget to play the “what-if” game as much as you can up front, to avoid potential issues later. For example, what if one of you has a child or spouse who might later want to join the business? What if one of you wants to move the company elsewhere, but the other doesn’t? What if one of you is caught doing something unethical, immoral or illegal? Talk out as many possible scenarios as you can think of, even the ones that make you chuckle from ludicrousness… You might be surprised at the points on which you and your partner differ, and it’s better to get everything out in the open now.

Still not sure about partnering up? You could always go old-school and check each other’s references. Talk to your potential partner’s colleagues, friends and family members. Find out if your potential partner is trusted and respected by others. Character references, professional opinions and honest assessments can go a long way toward putting your mind at ease about the person you might be working with. And if it’s someone you’ve known a long time, look to your own experiences with that person in previous social or business situations. Did he or she ever bail out of a tough spot and leave others holding the bag? Do they have a tendency to party hard or run through money fast? No matter how close you are to someone or how much you like them personally, this is business; you must consider the health of your potential company before sharing an office space with someone.

Once you’ve decided on a partnership, have a lawyer and accountant help you with the partnership agreement. Do NOT say, “We’re friends, so we don’t have to sign anything,” or “We trust each other, so there’s no need to put it in writing.” Put everything in writing that you can to avoid confusion, disputes and major problems. The written partnership agreement is a must. It should include who is investing what, who owns what percentage of the business, how and when partners get paid, how much they get paid, exit clauses, responsibilities and roles, at the minimum. It should also include how the agreement could be adjusted as the business evolves, and it should contain an outline for what to do if both partners want to get out.

How do you think your business should be run? Set up a plan with your partner and stick to it. Work out a routine for talking to each other, checking in on projects, updating each other on developments and assessing how the company is doing. Establish your separate roles and stick to them so that there’s no confusion about who does what or who reports to whom. Plan to have a meeting every few months to make sure the business is still on the right track and to determine the next steps and direction. You really can’t overcommunicate when you have a partner!

If possible, keep the business side separate from the social side. Your partner might be your best friend in the world, but you should try not to let business topics (or worse, business arguments) get in the way of your friendship. And of course, don’t forget why you chose this particular partner in the first place. You must like and trust him or her, so when the going gets tough, remind yourself of what’s positive about the arrangement and what good may still come out of it.

In a lot of ways, a healthy business partnership is like a good marriage: lots of give and take, lots of compromise, and above all, lots of communication. Good luck!

how to start a businessThe U.S. Government has a lot of tools and advice available to those looking to start or grow a business. You just need to know where to find those resources. The official business link to the government is Business.gov, and it features a great ten-point list on how to start a business. This list is less about coming up with creative ideas and more about making sure you cover all the legal issues, government steps and paperwork needed to get your business going. Here’s the list of steps you should follow:

  1. Research and plan your business – What are you planning to offer?
  2. Get free training and advice where possible – You don’t have to go it alone
  3. Choose a location, and be sure to follow any local zoning laws that are in place
  4. Get financing, including loans, venture capital and grants where available
  5. Figure out your business’s legal structure: sole proprietorship? LLC? Corporation? Non-profit?
  6. Register your business name with the state government
  7. Get a Tax ID number from the IRS and state revenue agency
  8. Register for state and local taxes – you can also get workers’ compensation, unemployment and disability insurance at this step
  9. Get any needed business licenses and permits
  10. Get ready to hire employees, but first, make sure you know what your legal responsibilities are as an employer

These tips for how to start a business are ideal for setting up a brick-and-mortar business in your local area. On the Business.gov site, each of the steps listed above comes with a link to the resources that will help you answer the relevant questions and get the help you need, so be sure to check out those links. There are also additional start-up resources on that page for specialized businesses like “green” businesses, online businesses, veteran-owned businesses and minority-owned businesses.

The U.S. Government wants your business to succeed, so be sure to take advantage of all of the resources made available to you! Good luck.