While managing your small business, you face a wide variety of decisions. What products will you offer to customers? What hours will best serve your customers’ needs? What are your long-term goals, and how can you achieve them? While many of these decisions are relatively minor, others—decisions about which vendors to work with, real estate investment and other concerns—can have a significant impact on your company. What should you know about decision-making in small businesses structured as a partnership?
Your partnership may benefit from individual decision-making.
You and your partners chose to do business together because you had complementary skills, and those different skills may make one partner better suited to certain decisions. For example, if one partner takes the lead in handling the business’s finances, they may have the information necessary to make important financial decisions that the other would not. This allows you and your partner to divide your efforts and remain agile while moving your business forward.
One partner may be able to make decisions even if the other disagrees.
Allowing individual partners to make decisions for the business can make your company more flexible. However, it can also open up your company to potential problems if you and your partner disagree about the best course of action for your company. The partners in a business generally have equal decision-making power, and one partner may commit your business to an important contract without the agreement or even knowledge of the other partner.
You can prepare your business for disagreements.
Whether you and your partner disagree occasionally about the best course of action or you generally agree on the next step to take, it can be important to prepare for disagreements. This may include outlining the process for making major decisions in your company in your partnership agreement to avoid future confusion or conflict.
When determining who can make decisions on behalf of your company and how to structure your partnership agreement, it may be beneficial to speak to an experienced attorney. They can help you prepare your business for future conflicts and lay the groundwork for future success.