When someone is going to start a business with a partner then he has to avoid partnership mistakes, below I discussed these mistakes in detail therefore I write this post for a businessmen who want to start a partnership business. I think that sole proprietorship is better than partnership but sometimes a person needs to make a partnership because he may have not enough funds or may be he has not much time to care his business and may be he lacks expertise in such field. So we can say it that partnership is a second option to sole proprietorship. If everything would be done correctly and the partners would not make mistakes then the business will grow easily. When we observe in our society then we conclude that 70% of the partnerships did not get success because of one partner or another or because of both. It might be possible that they both makes mistakes which led the business to loss.
Here are the some mistakes you must avoid when making a partnership with someone.
You should have a plan about your organization and you must have business goals as well as you should be keen to achieve your business goals by applying different techniques. So think when starting the partnership that if this partnership has the ability to make the business well developed. Must think about your partner abilities, assets and his past performances in the business.
Honesty is very important in partnership if each in both partner is not honest and financially corrupt then it will destroy your partnership as well as your business. When you are going to start a partnership with someone then you should observe his goodwill in terms of business and his past business deals. So be conscious about selecting your business partner.
Agreement is very important in every kind of business whether it is sole proprietorship or it is a partnership, even if you are going to start a business with your friend, you always need an agreement for the better future of the business. In the future if there a dispute occur between two partners then there is a legal way to solve the matter.
If your business is not limited then make sure that you both partners have extra funds because you might need funds in the future for the expansion of business or for some accidental loss. If there is deficiency of funds then would not be able to achieve your business goals.
Better communication is necessary between two partners for the success of business. You should give respect to your partner opinion, If you would take all the decisions solely then it might be a dispute can occur between the partners so a partner should make a communication excellent to avoid disputes.
Make your business LLC, If the business is not LLC then there is strong possibility of dispute between partner. therefore make your Business LLC, it gives your business the benefit that your business has limited liability and you can avoid a dispute.
Always leave an exit strategy because in future, a partnership can face a different issues like, death of one partner, a dispute or one partner wants to leave a business. Therefore you have to get legal advice from legal expert to counter any kind of issue in the future.