While everything that you have read or heard is vitally important to your success in partnerships, here are some of the takeaways that are especially critical.
- Don’t let fear get in the way of exploring potential partnership deals. Remember, your wealth is determined by the average sum of the five people with whom you most associate in business
- When choosing a potential partner, personality, work, and business ethics, communication and complementary skills are among the most important criteria to consider.
- Always have a written partnership or JV agreement because the default state laws may not be in your favor!
- Don’t forget to contemplate the “What if …” and fill in as many blanks as possible.
- There’s no such thing as a “standard deal” for a partnership or joint venture.
- It’s OK to be creative and to think outside of the box.
- Avoid accidental partnerships at all costs, before they end up costing you.
- Almost all problems can be avoided with a well-drafted operating agreement in an LLC, a well-drafted partnership agreement, and a buy-sell agreement.
- When presenting your partnership deal to potential investors, dress for success, anticipate objections, don’t act like you need the money, and remember that you get what you ask for.
- People would rather make less and know that they are getting their investment back than make a high-risk investment and end up losing everything.
- There is perceived safety in numbers, also known as the ‘herd theory’.
- Never take money from unsophisticated or grossly inexperienced people.
- And, never, ever forget that you don’t know what you don’t know!
We’ve discussed in past articles, the advantages, and disadvantages of using partners to not only do more deals but to get higher rates of return for all parties. You just have to follow the rules.
A final word of caution:
There are times when it makes total sense to seek the advice of an accountant, attorney or other professional that is well versed in the arena that you are doing business! That is some of the best money that you will ever spend.
There is no time like the present to get started. I wish you the very best of success!
Attorney William ("Bill") Bronchick, the host of Legalwiz.com, has authored six best-selling books and is sought nationwide for his 30+ years of real estate and legal knowledge. He has been interviewed by numerous media outlets, such as CNBC, TIME Magazine, USA Today, Investor Business Daily, Forbes, and the LA Times, to name a few. William Bronchick is the co-founder and past President of the Colorado Association of Real Estate Investors and the President of the Colorado Landlords Association. Click on the "About" link above for more information on William Bronchick.