The more official your partnership agreement is, the more likely it is to last. Half of remodeling partnerships begin as informal “handshake” agreements, but only 37% of these last more than three years. By comparison, 59% of partnerships last three or more years if an attorney writes or reviews the agreement, and 51% last that long if the agreement is simply spelled out in writing. Your partnership's structure may also influence its longevity. Partnerships structured as S- corporations, limited liability corporations (LLCs), and C-corporations last longer than those that are operated under the principal partner as a sole proprietorship.
What is the most important reason for your partnership's success?
“Both of us have the same vision and drive.”
“Each person trusts the other to do his job and does not interfere.” “Work to resolve conflicts as soon as they arise.” “He has his strong points, I have mine.”
“Individuals are responsible for their areas of expertise; however, all large propositions that affect the profitability and the future of the partnership are discussed with all partners present and a consensus is reached before acting.”
“Our understanding is that a partnership is a human relationship not unlike a marriage. To succeed, it takes compromise and understanding and is a constant work in progress.”
“Trust and respect.”
The following questions were asked of remodelers who are now, or have been at one time, in a business partnership:
Have you ever been in a business partnership? (not including spouse)
What was the primary reason the partnership dissolved?
What happened when the partnership dissolved?
Would you ever enter into a partnership again?
What is the primary reason you have never been in a partnership?
What was the primary reason for forming the partnership?
How did you enter the partnership?
How formal was the partnership agreement?
How many partners do or did you have?
What was the partners' relationship prior to going into business together? (choose all that apply)
What structure does or did the partnership take?
How do or did the partners split ownership?
How much ownership did or does the majority partner hold?
The Reader Panel survey is hosted and tallied by Specpan (www.specpan.com).