Love, love, love when you look around all you see is love during February. If you look around your office maybe you see your support staff, your managers, and your customers. I am sure you love them in your own way. They each play a key role in the success of your business. It is important to make sure they feel as if you appreciate them and are thankful for them. But that is a post for another time.
If you look hard enough, you will likely also find your partner or partners who help you run the business. Those people who took a risk with you to start, grow or enhance your company. The people you trust with your life or at least your lifeblood, who will do anything to help you in your business. Those people who believed in your vision so much that they were willing to put their own blood, sweat, tears and most importantly their money on the line for your dream.
Now is the time to show them some love. When you were in the throes of creating your company you may not have paid much attention to your partners. You may have been so hyper focused on your business and making it a success that you forgot to really look at the relationship between you and your partners. Now is the perfect time to take a closer look at your partnership.
Who is your partner? Is it a relative or family member? Make sure there is a clear distinction between your personal relationship and your family relationship. Nothing will break up a family faster than money and what people do with money. It is key to ensure that an independent third party has reviewed the financials and has advised the best way to make the distributions and allotments. You also want to make sure that money is distributed promptly, following an agreed upon schedule so there is no confusion. Additionally, if you are dealing with a family member you want to have roles divided and spelled out specifically to ensure there is no one who feels as if they are doing more or less than is required.
Is your partner an arm’s length relationship? It is important to ensure the relationships created in writing and not a gentleman’s agreement. Payment, work load, decision making and re-investment should be clearly outlined and more importantly the plan should be followed without diversion. There is nothing worse than believing something is going to take place only to find out your understanding is different from your partners.
It is important to re-visit partnership agreements from time to time to ensure no changes are necessary. Have you paid back any investments from every partner and moved into the straight profit. If so, you may need to review the profit sharing interests and value of the company. If your valuation was made at the beginning of the company but you have grown and exceed that valuation, it is important to update it and adjust ownership percentages accordingly. This is true whether you have a close or an arm’s length partner.
Do you have a silent partner? One who is only in for the money, to both give and receive? It is important to make sure their investment is being regularly paid. You should also know if they want any additional distribution. If they do not, invest their distribution back to the business. If they do, understand how, when and where they want to receive the extra cash.
Had a life event, i.e. a divorce, birth, death, etc.? Review the partnership agreement to understand succession plans and buy outs. You must ensure everything is app to date and correct so there is no fighting when the time comes to transfer ownership of the company.
Love your partner and make an appointment to chat with us today.
