1.5 Business Partners
Lot's of artists work with other artists, even if they create original work in solitude. Thinking “strength in numbers” may prove to be very beneficial when structuring your business as well. It is helpful to have partners. They may provide better expertise in areas you lack knowledge, and it can lighten the workload. Selecting the right business partner is critical to avoiding more work and stress. Whether it be a friend, relative or a random, establishing a new business relationship must be strategic, trustworthy, and beneficial.
Choose The Right Business Partner
Before looking into partnership agreements first establish the roles and duties of the individuals involved. This video on "How To Choose The Right Business Partnership" might help you decide your partners strategically.
Develop a Partnership Agreement
When considering partnerships, make sure everyone is on the same page. Your business partners and you may run into issues and disagreements, both creative and otherwise. Outline a set of rules you all can follow, known as a Partnership Agreement, to avoid a potentially damaging set of circumstances. This kind of agreement is especially critical when relationships exist outside of the business.
- Do you already have partners in mind?
- What type of selection process will you use to find the right partners?
- Do they have a similar aesthetic and style artistically?
- Do they complement your own skill set?
- What skills does the business need that you don't have?
- Does it matter if they understand the specifics and technical aspects of your discipline?
- Do you have close relationships with any of your partners? (i.e. friends and family)
- Are your partners comfortable, educated, and on the same page in terms of how your business is structured? If not, how will you communicate your business structure to your partners?
- How will you delegate roles and responsibilities?
- Try to match the needs of the creative and business operations with the strengths of each partner as best as you can. What you think is tedious may be second nature to someone else. Communicate about your preferences.
- How is the workload shared?
- Are partners expected to work set hours?
- Does one partner expect to work more or less than the other partners?
- What is the job description of each partner?
- What assets are the partners bringing into the business? (hard assets: cash, physical property, intellectual property, equipment; or soft assets: expertise, time, a broad network)?
- What type of compensation (salary, payroll, contracted services) works best for your business?
- Based on the roles, workload, responsibilities, and contributions of your partners, how will stake be divided among your members? In other words what percentage of the profits (and alternately, liability) is attributed to each person (50/50, 60/40)?
- How much authority will each partner have when handling contracts, selling and purchasing, and handling debt? When do you need to get the others' opinion?
- When you have a disagreement, what steps will you take to resolve it?
- It's not always easy to discuss, but what is your contingency plan for a death of a partner? What will happen to that partners shares of the business and intellectual property if this occurs?
- What happens if a partner leaves? In what circumstances may a partner leave without damages?
- Who has final say in a dispute?
- Is there a chief executive officer among partners?
- Will you take a vote? Does anyone's vote get more weight?
- When do involve an outside advisory board?
- At what point must you turn to mediation, arbitration, litigation?
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