Wednesday, August 3, 2016

Business Plans vs. Business Partner Agreements

When there is a dispute between partners in a business, the most common reason is misunderstanding the business agreement as well as a difference in defining the business process. What is needed to resolve these conflicts when they arise?

 All businesses partners should consult with a business attorney to establish an unbiased objective understanding between partners. His input can help them draw up a business plan and a written general partnership agreement that sites the responsibilities, and profit and loss distribution of each partner.

The business agreement should specify the rules about the general partnership. Having said that it is paramount that a business meeting is scheduled to review and/or create the groundwork for...

1. A Partnership agreement
2. A Business plan

Business Partnership Agreement

Your partnership agreement should provide the answer to following questions.

1. Who are the official partners of the business?

2. What percentage of ownership does each have?

3. Do you have a legal and binding partnership agreement in writing specifying the percentage of company ownership? If you do, good. If not, add it.

4. Is the partnership agreement signed by both parties and notarized?

5. Have you reviewed the agreement and associated financials with all parties concerned at least on a quarterly basis?

6. Specify duties, obligations and responsibilities of each partner going forward. The agreement should include how varied and unforeseen situations are to be handled and how this impacts payout.

Also note that  each partner is equally liable for the debts and obligations of the business, as well as the actions of the other partner(s). All parties are legally bound to fulfilling the agreement.

The partner agreement and the business plan are not the same. The agreement spells out the obligations and responsibilities of each partner, whereas the business plan defines the business itself, its mission and objectives while detailing the process by which the partners will carry this out.

Writing Your Business Plan

Regarding your business plan. Write a detailed plan that spells out  what the business is, it's purposes, reach and brand characteristics, as well as how you will run your business. Include the who, where, when, what, and how of the day to day business process. It should also include financials, a forecast of expenditures, revenue, and profit.  Detail how revenue is to be used, profit substantiation, partner salary, and the payout process. Review this with all partners on a regular basis.

Author: Mark Angelo Askew
As a business plan download archivist, Fimark's Winning Business Plans, I have written several clear and detailed business plans for scores of new startups that have maintained substantial profits over the years. Pre-written business plan templates are the smart choice for startups. It allows you to study your competitor, create partner delegations and establish business processes to determine what works best for you and your business partners. The marketing strategies included are the life-blood of your business. In addition, these plans help you get the investor funding required to sustain and grow your business and profits.