Choosing the Right Person for a Business Partner

partner, Wheaton business law attorneyIf you are starting a new business or thinking about a potential deal that could have a dramatic impact on your existing company, it is critical to choose your partners carefully. Selecting the right partner is especially important if your business is still in its infancy.

Perhaps the best way to think of a business partnership is as similar to marriage: the two of you are uniting your interests and efforts with the idea of building something that will be successful. The comparison to a marriage is even more appropriate when you consider that you will probably be spending more time with your business partner than you do with your spouse. An experienced business lawyer can assist you in selecting the right partner for your new enterprise.

Do You Need a Partner?

The first thing that you should consider when looking for a business partner is whether you even need a partner or not. To determine your needs, you should carefully analyze your business plan, your finances, and the current state of the market. In a partnership, both—or all, as the case may be—partners must take on certain risks and work with very little financial return for a period. Depending on your situation, it may be possible for you to stay in that role by yourself and to hire an employee that you trust but who is not invested financially in the company.

What Will Your Partner Do?

Before you select a partner, you should have a solid idea of what you need from him or her. If you only need capital and investors are not a viable option, you might wish to take on a silent financial partner. Conversely, you might need a great deal of assistance with certain parts of your company. If you have good sales and marketing skills, for example, your business may need someone with a more technical background to focus on product development.

It is also helpful to understand the level of personal investment that you expect from your partner. You may be fine with working 16-hour days, but will you want your partner to do the same? It is patently unfair to surprise your partner with your expectations only after you have signed a partnership agreement. Your attorney can work with you in identifying your needs and expectations for your ideal partner. From there, you can start your search for someone who fits the bill.

Compromise May Be Necessary

While you should develop an idea of what your perfect partner would be, keep in mind that you might never find a person who checks all of the boxes on your list. For example, you might find someone whose skills complement your own almost perfectly but who cannot commit to working long hours every week. In such a case, you might need to compromise on some of your expectations. With the help of your attorney, you can customize the compensation and risk structure of your partnership to account for your compromises.

Call a Wheaton Business Lawyer for Help

If you are considering a new partnership, an experienced DuPage County business law attorney can help you address all of the important details. Call Stock, Carlson, Oldfield & McGrath LLC at 630-665-2500 today for a confidential consultation.

Sources:

https://www.inc.com/minda-zetlin/how-to-tell-if-youve-found-the-right-business-partner.html

https://www.entrepreneur.com/slideshow/300168

Tips for Protecting Your Interests While Negotiating a Business Contract

Wheaton small business lawyersAlthough there are many key elements to running a successful business, few can outweigh the importance of successful contract negotiation. This single element can determine everything from a businesses’s profit margin for each transaction to the legal recourse that a business owner may take if a client or partner infringes on the company’s intellectual property. As such, it is critical that company owners understand the elements of effective business contract negotiation.

Examining the Five Elements of Contract Negotiation 

An effective business contract should do more than simply state the terms of an agreement; it should detail a reasonable arrangement that mutually benefits all involved parties, and it should clearly define the environment and conditions under which the parties are willing to operate. To reach such an agreement, business owners are encouraged to implement all five elements of contract negotiation, which include:

  1. Prepare for the Negotiation Process – To create a mutually beneficial contract, you must first prepare for the negotiation process. Start by determining their strengths and weaknesses and determine how they might use these in negotiations. Consider your own strengths and weaknesses as well, and determine your aims for the contract (what do you want to accomplish?). Also, know your deal-breakers and decide what you are willing to compromise on during the negotiation process;
  2. Clarify the Details – Once you have an idea of what should be in the contract (these are the terms under which you are willing to operate), it is important to ensure you closely examine all of the details. Are your conditions and expectations clear? Are the financial terms easy to understand? Is there any verbiage that may confuse your potential client? When does the contract come into effect, and when does it end? What happens if one party defaults on their part of the contract, and is that clearly stated? For best results, have your attorney examine the details and wording of the contract, as they can help you avoid potential loopholes and confusing or cloudy terms or details;
  3. Exert Pressure to Encourage Contract Signing – Parties typically only sign a contract when they feel confident that they can benefit from the contract and its terms – but a successful negotiation should take it one step further. The other party should feel as though they are losing something by not signing the contract. Know your market, your other options, and ensure you have a seasoned attorney to assist you with this element. 
  4. Offer Concessions (When and Why) – Concessions are not an automatic element in contract negotiations. Instead, they are usually added at the end, when parties feel a deal is possible and they are ready to close. Try to offer concessions that provide a great deal of benefit to your partner at a low cost to you, and determine if the concessions offered by the other party are beneficial enough to your company;
  5. Close the Deal – Once all the parties agree on the major aspects of the contract, it is important to close the deal. By not asking when you are truly interested and see a possible future for your partnership, you leave money on the table. 

Contact Our Wheaton Small Business Lawyers

At Stock, Carlson, Oldfield & McGrath, LLC, we understand the challenges that small businesses face because we are one ourselves. Backed by more than 40 years of experience, our seasoned DuPage County small business attorneys can protect your company’s interests during contract negotiations, and we can assist you in closing the deal. Call 630-665-2500 and schedule your consultation with our offices to get started today. 

Source:

https://smallbusiness.chron.com/negotiate-business-contract-61994.html

When Business Partnerships End – How to Survive a Business Divorce

Wheaton small business attorneysBusiness partnerships can end for all sorts of reasons. One of the partners may have a shift in their personal needs or goals (i.e. having a family, wanting to change industries, etc.). Other partnerships end over a matter of contention (unprofessional behavior, poorly job performance, etc.). Yet, regardless of the reasons, ending a partnership can be a complex process, and there are numerous pitfalls that can cost one or both parties a great deal of money. Learn how to mitigate against such issues, and discover how a seasoned business law attorney can help you survive the end of your business partnership. 

Protecting Your Business Before the End of a Partnership

While partners do not typically enter a business together, thinking it will one day end, it is highly encouraged that they anticipate and effectively plan for its eventual end. Not only does this make ending the partnership easier, should the need arise, it can also protect the interests of the partners and ensure the continuity of the business. Additionally, partners are encouraged to revisit their original agreement when needs change or the company grows, as this can ensure the exit strategy always reflects the business’s most current goals, profits, and vested parties. 

Business Valuations and the End of a Partnership

While an exit strategy will typically address most matters involved with ending a business partnership, there are elements to the process that must still be completed. One such item is an accurate valuation of the business, which accounts for all the company’s debts, assets, and projected future profits. Partners are encouraged to seek their valuation from an appraiser that they can both agree upon, instead of just one partner simply choosing an appraiser, as this can minimize the risk of a slated valuation that benefits only one of the vested parties (i.e. inflating the company’s debts to keep more of the money within the business). 

Deciding How to End Your Business Partnership

There are numerous methods that partners can use to end their relationship, but most require that the business either buy out the exiting party completely or make scheduled payments at pre-determined times. Businesses that need to preserve money for growth or are still new may benefit most from scheduled payment increments. Those that have the ability to make a complete buyout may benefit more from simply dissolving the partner completely. In either case, it is critical that parties discuss their options and the potential ramifications with a seasoned legal professional, as there are pros and cons to each method. 

Contact Our Wheaton Business Law Attorneys

Whether you need assistance with developing an exit strategy at the start of your business or need help with dissolving a business partner, Stock, Carlson, Oldfield & McGrath, LLC is the firm to call. Backed by more than four decades of experience, our DuPage County small business lawyers work hard to protect the interests and financial futures of our clients. Start by scheduling a personalized, no-obligation consultation. Call 630-665-2500 today. 

Source:

https://www.entrepreneur.com/article/191782