Free Nebraska Partnership Agreement

Reasons Why Business Partnerships Fail and The Value of A Partnership Agreement in Nebraska

Often, people with the best business ideas get into business partnerships for several reasons; among them, the search for financial support, and in other cases, people look for partners because they think that they need someone to back them up to offer credibility and leadership. And then there are cases where one enters into a partnership because they feel indebted to the person who helped them make sense of and create a great idea. Or, you may be one of the people who look at partnerships as the best way for you to make use of the resources or the skills of another.

Unfortunately, even with all these reasons, you are not guaranteed a successful business partnership. Why? Well, at the end of the day, the main reason why you’d look for a partner to offer one or more of the things mentioned above, is because you lack one crucial skill that makes the best entrepreneurs – confidence.

The truth is that you may have the resources, skills, and a decision-solving, critical-thinking mind, but if you lack the confidence to go after your goal, you may end up making some costly mistakes. But today, we don’t want to focus on partnerships and how your lack of confidence could make or break your chances of success.

There is a lot of good that could come from a business partnership. For starters, the partnership often means that you have a pool of complementary skills, resources, and you also get to share the risks and the costs of the business startup. If you find a partner that you share a common vision for the business, both in the short-term and in the long-term, the partnership could the best thing you ever create. The catch, however, is that the partnerships have their shortcomings. Like marriages, half (or more than half) of partnerships fail at the end.

But since you are here, it means that you want to be one of the people who form and run the most successful business partnerships.

So, which are the most common reasons for failed business partnerships, and how can you avoid these pitfalls?

    • 1. Absence of a written partnership agreement

      The absence of a written agreement has got to be the biggest reason why business partnerships fail. The main reason for this is that because of the nature of all business (and personal) partnerships, each and every detail plus the obligations of the parties to the partnership must be defined clearly, written, and signed by all partners when they are in agreement with the terms of the agreement.

      The partnership agreement in Nebraska represents a legally binding legal instrument that sets out the terms, rights, roles, responsibilities, of the partners, and it also spells out the relationship among partners and between the partners and the partnership. This agreement, also called the partnership contract, comes with specific clauses that guide the partnership business in different events/ circumstances. Some of these clauses include:

        • Capital contributions

        • Profits/ Loss sharing

        • Partner authority

        • Involvement of the partners and the need for non-competes

        • Conflict/ dispute resolution

        • Exit strategies – Partner buyout and exit procedures

        • Dissolution of the partnership

      Since these are the most important aspects of any business partnership, the written partnership agreement is crucial. To get you started on the right path, we recommend our free Nebraska partnership agreement form. This form is essentially a partnership agreement template that guides you in a step-by-step manner, ensuring that you create an enforceable partnership contract. The state of Nebraska might not have the partnership agreement as one of the mandatory documents for the formation of a partnership, but we recommend getting it to ensure streamlined business operations and the fast resolution of disputes among partners.

    • 2. Unequal Commitment Among the Partners

      The decision to start a business takes an incredible amount of effort, a huge financial commitment, and a bigger personal commitment. So, if you are going to form a partnership, you need to ensure that all the involved parties make an equal amount of commitment. If one partner makes a bigger financial commitment than the other(s), the partnership will be headed to the dogs, especially if the other partner(s) promise to offer ‘sweat equity’, but they fail to deliver. So, if you want to run a successful partnership, you need to make sure that everyone is 100% on board with making the partnership work. Each partner should be fully committed and immersed in the operations of the business.

    • 3. Differences in Values and Vision for the Business

      Essentially, before you get into a business partnership, you need to hold honest conversations with the other partner(s) to determine if you are making decisions and thinking on the same wavelength (or higher). If your long-term goals mirror a successful corporation in 5, 10, or 15 years, make sure that the person you choose to get to bed with has the same vision and is willing to do what it takes to get there.

At the end of the day, your partnership contract will specify your goals and vision, as well as the structures for commitment (financial or otherwise). But you must research and only get into a partnership with someone if you are certain that they are in it for the long haul.

To put in place structures that will guide your business partnership from Day One, download our free partnership agreement form here today. You can access the partnership agreement form for Omaha, Kearney, Lincoln, Grand Island, Norfolk, Scottsbluff, or any other city in Nebraska.