The Times Herald (Norristown, PA)
Poor choices can ruin business partnerships
NEW YORK >> Nearly a year after Courtney Jackson launched her clothing business, she took on a partner to help manage the company’s growth. A month into the partnership, something was wrong.
Jackson’s partner was supposed to handle half the company’s workload, but that didn’t happen. So, Jackson began taking on more of the responsibilities. When Jackson tried to discuss the division of work, “she was a little defensive at first, and asked me to be patient.” The situation didn’t improve, and they agreed to part at the end of last year, just three months after the partnership began. But under their partnership agreement, drawn up without an attorney, dividing the company’s assets would have weakened it financially. The partners decided to close, and Jackson lost her company.
The failure of a partnership often brings hard lessons for company owners. Problems often start when prospective partners don’t think through all the ramifications of what they’re doing — including whether they’ll be a good fit. They may not be clear on their expectations for each other, and how they’ll resolve conflicts. And they may not consider the legal consequences of how they set up their partnership, and how difficult it might be to unwind it; rather than hire an attorney, they write their own agreement that can be problematic when the relationship turns sour.
Jackson’s experience taught her that she needed to be more strategic in her business decisions. And in choosing a partner — Jackson had met hers through a mutual acquaintance,
“You need to make sure you know the person well enough to
CHOICES >> PAGE 2