In a Partnership, Make Clear the Division of Responsibilities

The one thing that really discouraged me about partnerships is the tendency of a partner to not respect the division of responsibilities.

In the partnership that I was in, my responsibility was marketing and public relations. My partner, without my knowledge, contracted with a newspaper for an ad that obligated us for payment. The ad was poorly written and the contracting price was not negotiated properly. But, we were stuck with it.

My advice as a consultant to any one starting a partnership is to make sure that the division of responsibilities is clearly delineated in the partnership agreement. And, by the way, if there is no written agreement, then no partnership.

Avoid this when Starting your Enterprise

Here is what you should avoid when starting your enterprise.

While the two corporate models for starting your enterprise are the non-profit model and the for-profit model, people more often choose either a sole proprietorship or a partnership.

As a sole proprietor you take all the risk and receive all the rewards. Whereas in a partnership you share the risks and the rewards. In my opinion, under most circumstances, the partnership way should be avoided. If you have the rare situation where you and the other partner(s) can agree on how the enterprise should be financed, managed, promoted, and how responsibilities should be shared, that would be fantastic. Even so the partnership agreement should be drafted, finalized and copies kept by each partner.  I don't care whether its a husband and wife, brother and brother or whatever.

As a rule, avoid the partnership arrangement. But if you feel that you must do it, make sure you have a clear, unambiguous written agreement.

I will have further things to say about my personal experience in a partnership and why I feel this way in my next blog.

If you have been involved or are currently in a partnership, let me know about your experiences, either positive or negative.