How Do I Bring Partners into the Business?

min read
Opinions expressed by Entrepreneur contributors are their own.
Business partners can be hands-on or passive investors, so the first thing you need to determine is which kind of partner you want.

Do you want someone local in Mexico? Do you want someone who will assist you in an active management capacity? Or do you want someone to provide you with boatloads of money so that you can hire more staff? One size does not fit all, so you want to get clear on what you need to accurately assess whether your potential "partners" can provide it.

Friends don't necessarily make for good business partners. You will want to carefully screen anyone you let into your business. Ask for credit reports and do background checks. And, yes, even with your friends.

In fact, especially with your friends. If you want to maintain your friendship, be even more vigilant about handling your business dealings and a professional manner.

Beyond that, be sure that you have a business entity that can accommodate different categories of owners. An S Corp will not give you the legal flexibility you need -- bringing in passive investors is best accommodated through a limited liability company or a C Corp.

And always have it done in writing. A qualified business attorney can help you navigate the variety of business partnership issues you will want to address.

Related: How to Find the Right Investor for Your Business
Related: 10 Steps to Organizing an LLC
More from Entrepreneur
Our Franchise Advisors will guide you through the entire franchising process, for FREE!
  1. Book a one-on-one session with a Franchise Advisor
  2. Take a survey about your needs & goals
  3. Find your ideal franchise
  4. Learn about that franchise
  5. Meet the franchisor
  6. Receive the best business resources
Make sure you’re covered if an employee gets injured at work by
  • Providing us with basic information about your business
  • Verifying details about your business with one of our specialists
  • Speaking with an agent who is specifically suited to insure your business
Whether you want to learn something new, be more productive, or make more money, the Entrepreneur Store has something for everyone:
  • Software
  • Gadgets
  • Online Courses
  • Travel Essentials
  • Housewares
  • Fitness & Health Devices
  • And More

Latest on Entrepreneur