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Increasing startups have led to many questions coming my way about partnerships and how they can best be created, maintained and, if necessary, broken up. The need for partners is obvious. Enterprise involves creativity, analysis, thought and forecasting, all of which require stimulus from sources outside ourselves. A good business partner acts as that stimulus and is in turn stimulated by our ideas. Great partnerships are legion; failed partnerships are seldom recorded but there are many more of them.

If we cut out the obvious “apple-pie” requirements of a partnership we can concentrate on the vitally important but often overlooked practicalities. First, what is the business offering as product or service? Writing mission statements may (or may not) be good investor relations but it won’t help you start a good business. Define what you are selling as a half-page advertisement in a broadsheet newspaper. Do a rough sketch of product if you want to but concentrate on the words. You have 100 words maximum to sell your wares, roughly the same as this paragraph.

If you already have a partner in mind – someone, perhaps, with whom you have been exploring or developing the idea, get your partner(s) to do the same – on their own and without collaborating. Comparing what you have both (or all) written will tell you more about your partner(s) than any other single act. You will also have a good description of your business when you have done this – but to be doubly sure, show it to a few friends who do not know what you are planning but who have a sense of business. If they understand it, it has passed the test.

Draft a shareholders agreement at the outset. This agreement incorporates a very simple strategic plan – nothing lengthy or complicated. If it runs to more than two pages it is wrong. Your shareholders agreement will include your exit strategy, as part of the plan. Your exit strategy tells you at what time and at what price you think – as of today – you will sell the business. That strategy does not mean that you will exit at that time. Your thinking will change as the business grows; you wrote the plans, you can vary them – but only if t you have them in the first place.

The shareholders agreement is the most important initial agreement you will have. It is the basis on which your partnership will work and, if necessary, break up. Pre-nuptial agreements may not be popular with their hint of a failed marriage even before the ceremony; a shareholders agreement to determine what happens when the partners fall out is essential if you are not to end up in court sooner or later. Very few partnerships last without a struggle at some stage.

How your shares are to be valued, bought and sold is a key part of the shareholders agreement. Depending on the investment amounts involved it may be necessary for a lawyer to look at your shareholders agreement. Even if you think it is, get someone who knows about start-ups and business to do so as well. Lawyers usually complicate agreements; successful business managers will see what is important.

Businesses succeed almost entirely because of how well people work together. Tomorrow I shall deal with more aspects of how to manage partners in business.

TerrificMentors International helps many people with their start ups. A chat is free. Email john.bittleston@terrificmentors.com.