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You meet at a function, or maybe someone introduces you to each other, pointing out how much you have in common. You are attracted to each other; his strengths seem to make up for your weaknesses, and vice versa. She’s great with numbers, while you’re good at strategy. You spend time getting to know each other. After a few weeks/months/years, you’re ready to take the next step . . . no, I’m not talking about getting married, I’m talking about starting a business together.
In a lot of ways, a closely held business is a lot like a marriage, and I often feel that part of my job is to act as “marriage” counselor (or in the worst case, divorce lawyer) and part business attorney. Whether in a business or marriage, I believe it is important to make a commitment only after you are sure about the person sitting across from you. In both situations, knowing what each party brings to the table and clarifying that you have the same goals will help ensure that the initial chemistry that brought you together turns into long term compatibility.
Of course, as a lawyer, I’m interested in the initial paperwork and contracts, but because I want to see my clients’ businesses succeed, I also want to emphasize planning and preparation. How would you and your colleague(s) handle adversity? Run a few worst-case scenarios by each other, and see how your reactions differ. Do you believe in saving for the future, or re-investing in the business right away by upgrading your supplies or equipment? Borrowing or spending?
Please get to know your future business partner very well before plunging in. Observe whether his or her words match his or her actions. Be certain you’re on the same page with respect to future goals. Then I’ll give you my blessing!