R. Shawn McBride recently spoke about having a clear understanding of partnership agreements.
Hey folks, Shawn here with you, talking about one of the keys to success in partnership agreements. And this one is so simple, it’s almost funny. You know, one of the keys to having a successful partnership is to have a clear understanding among the partners. All the partners need to know they’re doing the same thing and they’re going down the same road. Sounds easy, right? Of course, it’s difficult in human worlds because different people have different ideas. One partner will say one thing and think one thing, and another partner will say the same thing but think a different thing. We often find, when there are problems in partnerships, we trace back, and people had agreements, but one person thought the agreement meant one thing, the other person thought the agreement meant something else. For instance, when people say we want to grow and sell the business, that might mean three years and a million dollars to one partner, and it might mean five years and 20 million dollars to the other partner. And they sign the original agreement, but it’s only after they get two years into the partnership that they find they have different views.
So how do we get past this? How do we avoid this issue? Well, my years of experience working with others, building my law firm, and working with clients that have had these types of issues, and come to us too late, what I’ve learned is that we need to get into these things early when the partnership’s forming. We’re putting all that effort into building something. You’re going to put years of time and effort into your partnership, you got to get it right from the foundation. And this is where it’s key. It’s all about building a common understanding. How do we do this, practically? I send the partners I work with back with homework, often, and they have to write down what their partnership agreement is. How will the profits be allocated? Who’s doing what? How are we incentivizing people? What do we do for major decisions? What happens if we disagree? We build all this at the beginning. We have these very hard discussions.
Now sometimes, when business partners come to me, they decide they don’t want to be partners because of this. And that’s okay – that is not a bad outcome because they’ve saved a lot of time and effort. What’s terrible is when people are business partners and spend years, and they lose all that effort, and they get no wealth out of it. Not acceptable. So we want to build systems and processes that elevate the business and make sure we’re going to be successful no matter what.
So what’s your story? Are you struggling with business partnerships? Are you trying to get your business partnerships to the next level? If so, let us know, let us know how we can help. There are great resources at the McBride for Business YouTube channel and the R. Shawn McBride Fans and Audiences page on Facebook. They both have wonderful things for you. Check out our blogs and our law firm blogs. Make sure you get that business valuation checklist at mcbrideforbusiness.com and let me know how I can help. Maybe I can come in and do some one on one coaching with you and your partners, build something better. Maybe you’re part of an organization and you’d love to have a speaker talking about really successful partnership agreements, empowering owners through The 3 Laws of Empowerment process. Whatever you need, we’re here for you. Let me know what I can do for you to help make you and your business better. R. Shawn McBride signing off. I will see you very soon.
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This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. Each case is unique. Past results do not guarantee future outcomes. This article should not be treated as legal advice to any person or entity. Freeimages.com/photographer elemntz 11.
About the Author
R. Shawn McBride is the Chief Innovation Officer at McBride For Business, LLC. His signature keynote, The 3 Laws of Empowerment, gives audiences an entertaining look at how they can prepare, plan and protect themselves. You can email R. Shawn McBride or (214) 418-0258.