Rule #1 for Orlando Business Partners

As the Orlando economy recovers from bad unemployment and an even worse real estate market, new businesses are popping up all the time. People are getting back on their feet and are willing to take the plunge to start their own business.

Experience is one of the most valued assets a business owner can have under their belt. So many business owners say “I wish I knew then what I know today.” You can take all the classes, read all the books and take all the advice you can get, but nothing beats experience and learning from mistakes.

There’s a reason why Orlando business lawyers exist. You might see legal consultation as an unnecessary expense, but the value gained from their expertise is unmatched and definitely worth the cost.

There’s a common mistake amongst business partners that happens all too often – not having a written agreement. This is the #1 rule in businesses with two or more partners. Regardless of the length of friendship or the trust you might have for your business partner, a written agreement should be seen as a necessary step in starting a business.

Some people are afraid their business partner might see it as a lack of trust if they bring it up, but it truly benefits everyone involved. Let’s face it, business and money can change people quickly.

Sometimes one partner works harder than another and the entire business rests on their shoulders. Other times a simple difference in opinion can become a very big deal. Seeking a business attorney and creating a written agreement shouldn’t only be seen as a form of protection. It should also be viewed as a way to keep both parties responsible.

What Does a Written Agreement Cover?

Written agreements cover a variety of topics and are often dependent on the nature of the business. However most agreements outline the following:

Buyout price – If one partner wishes to leave the business, the other partner has the choice to buy that owners percentage of the business. The seller will want top dollar and the buyer will likely have the opposite view. Establishing a preset price or one that receives continual updating is the best way to go. This is tough to manage without a written agreement.

Management of operations – The roles should be clearly defined even if they’re equal.

Compensation – As part of role designation, percentage of ownership, and involvement, compensation should be outlined in the written agreement.

Adding partners – The process and at what price should all be determined in advance.

Disputes and resolution – Deciding how conflict is resolved is very important. Will mediation be required?

Exit strategy – Will the business be sold or liquidated?

These are just some of the topics covered in a written agreement and as you can see they’re all touchy subjects. Trying to work through these decisions after a partnership has gone sour can be complicated and costly without the creation of a written agreement. If you’re a business owner with partners, do yourself a favor and seek legal advice before it’s too late.