A partnership can be an excellent small business plan, allowing you to pool talents and financial resources with another professional. However, this corporate form does come with some risks you should consider before going into business with someone else. Below are a few things to consider when writing your small business plan.

What to Consider Before Forming a Partnership

1. Personal Liability

In a partnership, each partner is personally liable for the debts and liabilities of the entire business. This means that if a partner enters into a contract without your knowledge, you may be held financially responsible for any losses that result.

You may also have to pay for losses that result from an employee damaging a client’s property or a customer getting injured on your property. Before entering into a partnership, understand that they offer almost no liability protection.

2. Personal Relationships Are Important

You’ll likely be working closely with your partner for several hours per day, so it’s important to start a business with someone you like and admire. Even if they have complementary skills and a great vision, your partnership likely won’t succeed if you don’t get along on a personal level.

3. Clearly Outline Roles

An even split of profits may seem fair in the beginning, but over time one partner may wind up doing more work than the other. Setting expectations at the beginning can help prevent resentment from spoiling your business relationships.

When writing your small business plan, clearly outline roles and responsibilities at the outset. Once you have a clear vision of how the business will function, you’ll be able to appropriately allocate the profits of your enterprise.

If you’re starting a new business in the St. Louis area, Greater North County Chamber of Commerce is committed to helping you succeed. They’ve been providing assistance to entrepreneurs throughout the region since 1955, offering everything from small business planning assistance to regular networking opportunities and educational support. Visit their website or call (314) 831-3500 to learn about the benefits of becoming a member, and follow their Facebook for more tips and updates.