Good morning bloggers! Herewith the next instalment of the workshop. Remember, if you have any questions please do not hesitate to e-mail me or raise the comment.
Have a great day
Regards
Nikki
A.2. Contracts between you and a partner.
Okay, so you meet someone that you “click” with immediately, or you’ve been friends with someone who you’ve known for years and you trust with your life – that’s great! Trust them with your life – but not your money nor your business. That’s not to say that you have to be suspicious of people and their motives all the time. It doesn’t mean that everyone you know is out to get you either – what it does mean, however, is be aware of what’s going on around you – information is knowledge, knowledge is power!
Why do you need a partner? What are they going to be doing? What are their responsibilities? What are their expectations? What are your expectations? Who gets what? Who does what (segregation of duties)? Who pays for what? Who is paid for what? If the whole venture goes “belly up” how do you get out of it?
These are all questions that need to be asked before you get into bed with a partner! Be clear about what you want out of the deal; be clear about what they want out of the deal. Above all – be fair!
Again, write down (each of you), in your own words what you require and thereafter get the lawyers to put the requirements down in legalese.
Remember, your document should cover the following:
How you put the whole thing together. Who pays for what and how much.
Segregation of duties – what the responsibilities are for each person. For example one person may be excellent on the financial side and the other on the marketing side. This should be stipulated.
Be clear on the money issues. Some of you may feel you are doing more than the other – in this case why not put the whole thing into percentages? Partner A brought in 60% of the business this month and partner B brought in 40%, therefore after expenses partner A should get 60% of the profit and partner B 40% and so on. Make sure you are both in agreement on what expenses the business will cover – petrol, car maintenance, cell phones, etc. Another alternative is, that once the expenses are paid a percentage of the profit remains in the business (say 10% or 15%) and only after that can the partners take out their respective profits. In this way the business will always have some capital and be liquid. Alternatively each partner gets a fixed amount. Whichever way you decide, make sure that all information is documented and that each partner is clear on what is happening to the finances.
Not all marriages are made in heaven: divorce statistics prove this over and over again. So don’t go into this with rose tinted glasses and starry eyes. Take the emotion out of the situation. If the union needs to be dissolved, for whatever reason – document what is going to happen and how and put it into the contract. In this way the business can remain standing and your names credible.
Okay, so you meet someone that you “click” with immediately, or you’ve been friends with someone who you’ve known for years and you trust with your life – that’s great! Trust them with your life – but not your money nor your business. That’s not to say that you have to be suspicious of people and their motives all the time. It doesn’t mean that everyone you know is out to get you either – what it does mean, however, is be aware of what’s going on around you – information is knowledge, knowledge is power!
Why do you need a partner? What are they going to be doing? What are their responsibilities? What are their expectations? What are your expectations? Who gets what? Who does what (segregation of duties)? Who pays for what? Who is paid for what? If the whole venture goes “belly up” how do you get out of it?
These are all questions that need to be asked before you get into bed with a partner! Be clear about what you want out of the deal; be clear about what they want out of the deal. Above all – be fair!
Again, write down (each of you), in your own words what you require and thereafter get the lawyers to put the requirements down in legalese.
Remember, your document should cover the following:
How you put the whole thing together. Who pays for what and how much.
Segregation of duties – what the responsibilities are for each person. For example one person may be excellent on the financial side and the other on the marketing side. This should be stipulated.
Be clear on the money issues. Some of you may feel you are doing more than the other – in this case why not put the whole thing into percentages? Partner A brought in 60% of the business this month and partner B brought in 40%, therefore after expenses partner A should get 60% of the profit and partner B 40% and so on. Make sure you are both in agreement on what expenses the business will cover – petrol, car maintenance, cell phones, etc. Another alternative is, that once the expenses are paid a percentage of the profit remains in the business (say 10% or 15%) and only after that can the partners take out their respective profits. In this way the business will always have some capital and be liquid. Alternatively each partner gets a fixed amount. Whichever way you decide, make sure that all information is documented and that each partner is clear on what is happening to the finances.
Not all marriages are made in heaven: divorce statistics prove this over and over again. So don’t go into this with rose tinted glasses and starry eyes. Take the emotion out of the situation. If the union needs to be dissolved, for whatever reason – document what is going to happen and how and put it into the contract. In this way the business can remain standing and your names credible.
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