Making the Case for Pre-Venture Counseling

When you enter into a business venture with another person, you are essentially establishing a relationship which implies a set of duties and obligations — think a marriage without the romance (in most cases anyways). Owning and operating a small business comes with its own unique set of challenges. What usually begins with a sense of liberation, excitement, and motivation can quickly devolve if you and your partner have not thoroughly set goals, guidelines, boundaries, and expectations. Before you take the leap, set up your net; investing the time now, can save your business later.

Pre-venture counseling sessions are much like premarital counseling sessions in that they help prospective partners dig in to the prickly aspects of being in a joint venture with another person BEFORE those thorny issues arise. Such matters to discuss and dissect include:

  • How can your partner expect you to communicate with them when things get tense?
  • What will happen if one of you gets sick or injured and needs to be away from the business? Or has a baby? Or when a parent falls ill back east?  How long is too long to be away while still receiving income?
  • Where do you see the venture in five years? Ten years? Twenty years?
  • What happens when one of you loves a member of the office staff, while the other of you dreads seeing him/her every day?
  • What is the extent of the time commitment you expect from your partner? Will you both be putting in the same amount of time? What happens when that agreement fails?
  • Who is responsible for filing taxes, books, marketing, sales, etc.? Do you both have the same understanding of what goes into each of those tasks? (One very common squabble: You spend your days attending golf tournaments and going to mixers, while I am stuck in the office balancing the books.)
  • What happens when one of you wants out? When one of you divorces or passes away?

The list above certainly isn’t inclusive; just like a marriage, there are a million paths a joint venture can take. However, with proper planning, communication, and clear expectations, this path can be a little less rugged and far more fun.

Kristin N. Capritto is an attorney and mediator at FORESTER PURCELL STOWELL PC in Sacramento, California. Her practice is focused on estate and business planning.

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