If you want to read about business partnerships gone wrong, check out “Me and You — So Happy Together?” in NAILS’ October 2008 issue. In it, Michelle Pratt interviews two techs who had bad experiences with salon co-ownership. She also speaks with attorney Keith R. Havens, who recommends LLCs, or Limited Liability Companies, as an alternative to partnerships.
Whatever legal form your joint venture takes, Havens recommends you explicitly address the following basic questions in your business contract:
1. Who is in charge?
2. Who can make business and financial decisions — one person or must there be agreement
among all partners/members?
3. What is the breakdown and assignment of responsibilities?
4. Create positions and job descriptions. Who is assigned and responsible for each job?
5. If a person acts against the agreement, how is the wronged party compensated?
6. How are revenues dispersed?
7. Where does the money come from to cover shortfalls in the business?
8. What is the exit strategy if a person wants to leave, becomes ill, or dies?