Monday, September 08, 2014

Use Your Business Plan to Get Ownership in Writing

Small Business Administration:

Way too often, you can add up the percent of ownership in the heads of the partners and discover between them they think they own 200% of the company. That’s because one thinks the idea was worth 50% or more of the ownership, the other thinks the day-to-day work was worth 50% or more of the ownership, and another thinks having written checks and invested was worth 50% or more of the ownership.

What I particularly hate in this context is when people spend the time and do the work and develop the business without spelling these things out, and then, when it’s way too late, discover that they had radically different ideas about who owns what.

This is a great use of the business plan. If there’s awkwardness about who owns what when friends and family are involved, you solve that with the need to spell it all out for the plan. Don’t wait. Don’t wonder. Talk it out. The business plan is a built-in natural format that all of you can understand.

The key here is to get it in writing. That doesn't mean legal contracts written and negotiated by attorneys, at least not in normal cases, and not in the beginning.

1 comment:

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