On Bauer Business Focus — A conversation on planning ahead with Andrew Schneider, business reporter for KUHF 88.7 FM.
Starting a business can be a milestone in a person’s life, and if it’s a joint venture, it may have many similarities to another common partnership — marriage.
According to Paul Kellogg, partner at Hughes, Watters & Askanase, poor planning with partners at the beginning of a startup could lead to financial trouble if things ultimately don’t work out.
“Nobody going into business wants to hear bad news,” Kellogg said during a recent visit with Bauer Business Focus. “You have to expect the best and plan for the worst because things happen and small businesses are like marriages. You go in with starry eyes and everything’s going to be wonderful and perfect, but just like marriages, a lot of businesses end in divorce, and you have to be ready.”
While many believe it may be easy to cut ties with startup partners, Kellogg says that “it’s not like a divorce where a court will force you to do it; you don’t want to do that with a business because it’s expensive and time consuming.”
“You have to have some ground rules at the beginning about who’s going to do what,” Kellogg added. “There’s a lot of bitterness at the end of a break up, and that’s why it’s very important to talk to a business lawyer on the front end so they can set something up so that there are less confrontational ways to get out of the relationship if it does go sour.”
Click here to hear the full interview.