9 Things to Consider Before Forming a Business Partnership
Getting into a business partnership has its benefits. It allows all contributors to share the stakes in the business. Depending on the risk appetites of partners, a business can have a general or limited liability partnership. Limited partners are only there to provide funding to the business. They have no say in business operations, neither do they share the responsibility of any debt or other business obligations. General Partners operate the business and share its liabilities as well. Since limited liability partnerships require a lot of paperwork, people usually tend to form general partnerships in businesses.Things to Consider Before Setting Up A Business PartnershipBusiness partnerships are a great way to share your profit and loss with someone you can trust. However, a poorly executed partnerships can turn out to be a disaster for the business. Here are some useful ways to protect your interests while forming a new business partnership:1. Being Sure Of Why You Need a PartnerBefore entering into a business partnership with someone, you need to ask yourself why you need a partner. If you are looking for just an investor, then a limited liability partnership should suffice. However, if you are trying to create a tax shield for your business, the general partnership would be a better choice.Business partners should complement each other in terms of experience and skills. If you are a technology enthusiast, teaming up with a professional with extensive marketing experience can be quite beneficial.2. Understanding Your Partner’s Current Financial SituationBefore asking someone to commit to your business, you need to understand their financial situation. When starting up a business, there may be some amount of initial capital required. If business partners have enough financial resources, they will not require funding from other resources. This will lower a firm’s debt and increase the owner’s equity.3. Background CheckEven if you trust someone to be your business partner, there is no harm in performing a background check. Calling a couple of professional and personal references can give you a fair idea about their work ethics. Background checks help you avoid any future surprises when you start working with your business partner. If your business partner is used to sitting late and you are not, you can divide responsibilities accordingly.It is a good idea to check if your partner has any prior experience in running a new business venture. This will tell you how they performed in their previous endeavors.4. Have an Attorney Vet the Partnership DocumentsMake sure you take legal opinion before signing any partnership agreements. It is one of the most useful ways to protect your rights and interests in a business partnership. It is important to have a good understanding of each clause, as a poorly written agreement can make you run into liability issues.You should make sure to add or delete any relevant clause before entering into a partnership. This is because it is cumbersome to make amendments once the agreement has been signed.5. The Partnership Should Be Solely Based On Business TermsBusiness partnerships should not be based on personal relationships or preferences. There should be strong accountability measures put in place from the very first day to track performance. Responsibilities should be clearly defined and performing metrics should indicate every individual’s contribution towards the business.Having a weak accountability and performance measurement system is one of the reasons why many partnerships fail. Rather than putting in their efforts, owners start blaming each other for the wrong decisions and resulting in company losses.6. The Commitment Level of Your Business PartnerAll partnerships start on friendly terms and with great enthusiasm. However, some people lose excitement along the way due to everyday slog. Therefore, you need to understand the commitment level of your partner before entering into a business partnership with them.Your business partner(s) should be able to show the same level of commitment at every stage of the business. If they do not remain committed to the business, it will reflect in their work and can be detrimental to the business as well. The best way to maintain the commitment level of each business partner is to set desired expectations from every person from the very first day.While entering into a partnership agreement, you need to have an idea about your partner’s added responsibilities. Responsibilities such as taking care of an elderly parent should be given due thought to set realistic expectations. This gives room for compassion and flexibility in your work ethics.7. What Will Happen If a Partner Exits the BusinessJust like any other contract, a business venture requires a prenup. This would outline what happens in case a partner wishes to exit the business. Some of the questions to answer in such a scenario include:
How will the exiting party receive compensation?
How will the division of resources take place among the remaining business partners?
Also, how will you divide the responsibilities?
8. Who Will Be In Charge Of Daily OperationsEven when there is a 50-50 partnership, someone needs to be in charge of daily operations. Positions including CEO and Director need to be allocated to appropriate individuals including the business partners from the beginning.This helps in creating an organizational structure and further defining the roles and responsibilities of each stakeholder. When each individual knows what is expected of him or her, they are more likely to perform better in their role.9. You Share the Same Values and VisionEntering into a business partnership with someone who shares the same values and vision makes the running of daily operations considerably easy. You can make important business decisions quickly and define long-term strategies. However, sometimes, even the most like-minded individuals can disagree on important decisions. In such cases, it is essential to keep in mind the long-term goals of the business.Bottom LineBusiness partnerships are a great way to share liabilities and increase funding when setting up a new business. To make a business partnership successful, it is important to find a partner that will help you make fruitful decisions for the business. Thus, pay attention to the above-mentioned integral aspects, as a weak partner(s) can prove detrimental for your new venture.
Mortgage Brokers: Basics That You Should Know
The term mortgage broker refers to a company or person that can make arrangement for a mortgage between two entities. These entities are usually a lender and a borrower. The lender is known as a mortgage lender. This professional works directly with the borrower to help them opt for the right type of mortgage. In this article, we are going to find out more about this professional. Read on to now more.
Why should you use a Mortgage Broker?
Basically, this professional helps you throughout the process of looking for and applying for a mortgage. Their role is to get you the best deal on the basis of your circumstances. Listed below are some of the services they offer.
They help you make an assessment of your financial situation
They suggest the most suitable option to meet your needs
They help you search the market to help you look for the best deal to match your criteria
Now that you know about the role of these professionals, we suggest that you check out the pros and cons of working with one. This will help you decide whether you should go with these pros or not.
Pros
Convenience: If you don’t know anything about these markets and finance, you may want to work with a broker. After all, it requires a great deal of time, money and effort to look for deals, handle the paperwork and talk to lenders.
Access: Since these pros have a good deal of experience in the field, they are in touch with other professionals as well. For instance, they have a good business relationship with many lenders as well. Therefore, they can help you look for the best deal based on your needs.
Expertise: The problem is that the mortgage industry is not easy for everyone to understand. When the rate of interest goes up or down, it has a great impact on the number of mortgage deals. Therefore, consulting an expert is a stroke of genius. After all, you don’t want to make decisions based on your lack of knowledge.
Cons
Cost: Since these professionals charge for their services, you may have to set a budget to use their services. This will reduce the amount of money you can set aside for rainy days.
The service charges of these professionals vary significantly. Therefore, we suggest that you shop around before hiring one to meet your needs.
Limitations: It’s important to keep in mind that not all of these brokers have access to the whole market, which means depending on a single broker may limit the options available to you.
Quality: Experience and qualifications may vary between brokers. Therefore, if you end up hiring an inexperienced one, you may not be able to go through the process in a timely fashion. And you may not be able to get the best deal.
In short, mortgage brokers can help you get the best house for you. Before you hire one, make sure you consider the pros and cons first.
If you are looking for the best mortgage deal, you may want to check out Mortgage Specialist for more information. They will help you get the best deal.
Important Things To Check Before Moving To An Apartment
You’ve found a great apartment in your price range and ready to move in. But before you pack your bags and boxes and load up the moving truck, you’ll want to do an apartment walkthrough. Essentially, it’s like running through a home safety checklist; you walk through the apartment with your landlord or rental agent and determine if there are any issues that need fixing before you move in.
These Are Some Important Things To Check Before Moving To An Apartment
Safety
Make sure that smoke detectors and fire extinguishers are in place. Check the building’s hallways and other areas for fire safety features.
If your apartment windows has bars, are they approved safety gates that don’t require a key? Also make sure that each room has an operable window large enough to escape through. Find out what the fire escape plan is for the building and make sure you know where to go
Doors and windows
Make Sure to check all locks and door knobs are secure and not wobbly and that you will be supplied with keys for each lock.
Try all windows and doors to make sure they open and close properly.
Are window coverings intact? Note any missing screens. This is also a good opportunity to check for drafts.
Plumbing
Look around the toilets and under and around every sink to make sure that nothing is damp or dripping.
Make sure that faucets shut off properly and that all sink stops work.
Check the tub and sinks for missing grout or tiles.
Turn the shower on to test for water pressure and hot water temperature. It’s important to find out if you share a hot water heater or if your unit has its own. (This could affect the kind of shower you’ll have in the mornings!)
Appliances
Test each appliance to make sure it works properly.
On the stove, test each burner and the oven/broiler.
Check the refrigerator, freezer, dishwasher, air conditioning/heating system, washer and dryer.
If the laundry facilities are in a common area, be sure it is clean, bright, well maintained and accessible to residents only.
Electrical
It’s a good idea to bring a small appliance with you like a radio or clock to test outlets.
Turn all the wall switches off and on to make sure they work properly.
General condition
Check the ceilings to make sure there isn’t any water damage, and check the walls for peeling paint or wallpaper.
Check closets, sinks and elsewhere for signs of rodents or insects, such as droppings and chew marks.