How to Structure a Business Partnership

When it comes to running a small business, a partnership can either be a dream situation or a disaster waiting to happen. Taking the time to structure a business partnership can be the key to creating a successful business.

Instructions

1. Agree on a vision for your business. Partners with the same goals and strategy for the business have a better chance of success.

2. Define each partner's individual role within the business. Assign each partner a position that enhances their unique skills and strengths. For example, one partner may be a great salesperson and marketing strategist, while the other partner has top-notch organization and management skills.

3. Hold regular meetings. These meetings can be monthly or weekly. They keep the lines of communication open, give partners an opportunity to handle differences of opinion, review roles and brainstorm.

4. Create a partnership agreement. An agreement helps business owners avoid potential problems as they structure the business partnership and as the business grows. Be sure to include each partner's percentage of ownership of the business, a plan for how profits and losses will be shared, each partner's pay and compensation.

5. Discuss how assets will be distributed if you decide to stop doing business, any provisions for changes in the partnership or if both partners decide to dissolve the partnership. Include this information in your partnership agreement, as well as preferred methods for handling any disagreements such as arbitration.

6. Consult with an attorney to help you and your partner draft your partnership agreement. An attorney can make sure everything is in order and legally binding as you structure your business partnership.