assets by setting up a limited liability company that protects partners from corporate problems (and each other). You also might establish a trust to double protect your assets from discovery and other negative legal procedures. Your accountant and/or attorney may advise you to hold off on establishing a partnership until after your prospective partner has gotten through any legal or financial difficulty that could hurt the business.
AVOID THE PARITY BATTLE
Although Jones has brought most of the clients into the business and considers herself its driving force, she sees Worley’s inspiration and talent as intangible contributions that make their business picture complete.
While not the case for Jones and Worley, weighing each person’s contributions to the partnership commonly leads to feuds. Except when measuring dollars and cents, the day you start running the business with a partner, all parity ends. ” I here is no mathematical formula to establish parity in terms of who’s contributing more time and effort to the business. At any given point in time, the person who owns 51% could deliver as little as 10% or as much as 100%,” says attorney Taylor. “If there are expectations among partners of absolute parity, the business is doomed to fail.”
Of course, some evaluation must take place to justify the continuation of the partnership. But too much time spent on this issue probably means you’re not paying enough attention to what counts, the profitability of your products or services. If, however, your partner is failing to hold up one end of the financial bargain, you have a better chance of winning the parity battle if you’ve established written criteria that both parties agreed to when the partnership agreement was first inked.
PARTNER WITH A PURPOSE
Some entrepreneurs move easily in and out of partnerships to achieve specific growth objectives, ranging from joint venturing to exploit short-term opportunities to taking on or becoming a subcontractor to increase coverage of a market or audience. Bob Adams, president of Adams-McClure Inc., a promotional printing company based in Denver, has partnered in a variety of ways to provide a full-service offering that takes a client’s job from prepress through finishing and delivery, all under one corporate umbrella.
When an opportunity arose in 1994 to purchase a small printing company whose assets were about to be liquidated after the owner’s death, Adams moved quickly. He already had a client lined up-his former employer, Coors Brewing Co. All he needed to get the presses up and running were partners–that is, expertise and capital–to help pull the down payment together. “I needed partners who knew the printing business, could think fast and keep up,” says Adams. He turned to three people he knew and felt comfortable with, Randy McClure, Bob Knappe Sr. and Joe Frink, former business associates with printer’s ink in their blood. “Frink’s experience in pre-press, plus Knappe’s and McClure’s knowledge of sales, production and finishing, covered the business from A to Z,” says Adams.
In addition, Knappe had successfully run his own finishing company for five years, which brought