Starting, running, and participating in a successful business venture can be one of the most satisfying journeys in life. The process of getting the organization put together, off the ground, and making money can be exhausting and it’s normally not a challenge people take on their own.
In the business world, entrepreneurs with grand ideas are likely going to bring in close friends and/or colleagues into their plan. After all, it’s best to have multiple minds working towards the same goal and to have checks and balances along the way. However, it’s important to set boundaries and define the professional relationship with any business partner to make sure complications don’t arise down the line.
We want to help you understand and set those boundaries so your fruitful relationship doesn’t spoil in the future.
Business vs. personal boundaries
There’s nothing saying you shouldn’t go into business with a friend even if there are plenty of risks that come with it. This can be one of the most beneficial ways to go about it because you’ll already know each other well and can better understand needs, desires, and pressure points. A strong friendship can be a great starting point for a business relationship as long as you both handle expectations properly.
Where matters can get complicated is if you and your partner don’t clearly define what aspects of your relationship are purely business and which ones are intended for pleasure. There’s a time for work and a time for play. Failing to outline this could lead to confusion and frustration in the future.
This will be important because there may be a time when your friendship is facing turbulence. Under no circumstances can you let your personal relationship get in the way of the growth of your business.
Intellectual boundaries play several different roles in business relationships. This will allow each partner to bring a proportionate amount of innovation to the table in their own role as a partner.
For one, you’re going to want to make sure the ideas and productivity are respected and honored regardless of who brings them to the table. The experience and background of each partner will dictate some of the intellectual expectations placed on each, but no one partner’s views are automatically viewed as superior or inferior to the other.
Another factor of intellectual boundaries goes into who will sign their names on official paperwork. Are both of you committed to signing each name on patents, trademarks, and other company documents regardless of who contributed to those specific aspects? Whatever avenue you take in this regard, it’s important to stick to this agreement for all future filings and avoid claims of ownership when one contributed more than the other.
This one should go without saying, but it’s probably the most important. You’re going to need to specifically outline who has access to company finances, who can use those funds, and who can execute financial decisions on the company’s behalf.
You don’t want to run into a situation where multiple partners are executing the same or similar financial commitments simultaneously as this could cost you your business. Constant communication and execution of financial boundaries could make the biggest difference for businesses of any size. This can also extend to the use and application of company materials, as well.
You’re going to want to work closely with a business law attorney to make sure you don’t run into any litigation issues that bring your hard work to the ground. You’ll want to define whether or not each partner should retain their own attorney or if all partners have one attorney representing the entire business.
At Capshaw & Associates, we bring unmatched experience and better solutions to any business in need. Contact our offices today and protect your hard work from the troubles of business litigation.