When you start a pet sitting business, you never think about the end, right? You start your business, all excited, with all these hopes and dreams of changing the world and having all this freedom and flexibility to do what you want.
Or maybe you already have this wonderful business going part time or full blast and you meet that (what you think is) love of your life. You get married, no prenup, because let’s face it, neither one of you is made of money… and you live happily ever after.
Or do you?
Or let’s even say that you and your friend or co-worker decide, “heck! we can do this together!” and you start a business together, skipping down the yellow brick road singing along together. You think this is great! I get to be with someone I trust and make money doing what I love.
But is that true?
When Beth Green came to Arizona to do a little R&R and business boot camp, we felt strongly that we needed to share her story. We needed to warn the pet sitting industry about what could happen to your business. As we both point out in this video, it is almost irresponsible not to plan for a business dissolution. We plan for marketing, finances, customers, employees, but not an exit plan? It is easily forgotten in the mix, which is why Beth & I really wanted to bring home this very important message.
Why Do So Many People Forget About Partnership Agreements?
A partnership agreement is a document that you sign when you first start a business or a legal relationship (like a marriage) explaining what each other’s roles are in the business *and* what course of action you have agreed to take when one partner wants out of the business relationship. Without these partnership agreements – your business is left exposed and all your hard work could go down the drain.
How Easy Is It To Get A Partnership Agreement?
It is as easy as typing it into your friend, GOOGLE, and then editing it to your satisfaction. Have a lawyer give it a look over, and sign it in front of a notary.
If you are starting a business together, the obvious time to do it is at the beginning when you start. For marriage, it would be a prenup. If you are already married, it would be a post nuptial or a partnership agreement.
What Happens if You Don’t Get Partnership Agreements?
Sit down because you might not like this answer. The options are basically this:
1. You have to remain business partners until one of you caves in.
2. One of you will have to buy the other out and argue over what the business is worth.
3. One abandons it and creates a lot of problems.
I am not a lawyer and there might be more scenarios but this is what I have seen as a business coach.
If Your Business Partner Dies, Their Beneficiary Could Also Come After You:
After I posted this article, I got lots of examples flooding in of other people who have dealt with the fall outs of not having a partnership agreement. Take a look at the lesson Lauren’s family learned:
How Important Is This Really Bella?
Honestly – if you are married right now, you need to have this document. As they say, the only thing that is definite in life is death and taxes. I have had about 3 calls in the past 1.5 years about people freaking out because they are getting a divorce and they are scared that they significant other is going to take away the business. They are terrified because it is their livelihood. Their job. Part of what defines them as a person!
It is VERY real.
Another True Story That You Have To Read:
Soon after this post went live, I had another pet sitting business owner come forward and tell me her story. She agreed to go on record and have me share it here with you to show you all that this stuff really does happen….
Jessica Greenfield writes:
So my story is very long…. Lol. But I’m going to sum it up and give you the parts that are relevant to the topic at hand. Because I could seriously write a book about my experience with being married, starting a business, drug addiction (my ex, not me!), business failure and divorce…
But what really resonated with me about your video with Beth was when Beth said everyone thinks that nothing will ever happen to their relationship because you are in love and everything is great. Or something to that effect… That’s exactly what I thought too.
While my ex husband and I were engaged, he was laid off from his job. The factory he was working at went out of business and we found ourselves wondering what we were going to do. He made 3x as much as I did at my job so it was a hard hit. After a while of not being able to find another job, my ex wanted to start his own business. He had bad credit so of course, I told him to put everything in my name. He started an online business while I worked full time at my job and helped out here and there. I was able to quit my job after a few months and things were going great (or so I thought). We got married and moved out of our house and converted it to a store. Unfortunately, after just a short time, I realized that things weren’t quite right… money missing, I was being lied to about things, and he wouldn’t let me do or look at any of the financials. I found out my husband was on drugs and driving our business and our entire lives into the ground.
Long story short, we went out of business and got divorced. But everything was in my name. My ex moved out of state and avoided getting the divorce papers for almost a year. I needed to file bankruptcy asap so I could start repairing my life and move on but I couldn’t do this until the divorce was settled. So, after much drama and BS, I decided to suck it up and we each took all the debt that was in our own names. I walked away with $400,000 in debt and he got a $1,500 light bill….
So, my story is a little different than Beth’s. Beth had a successful business that her husband was not a part of and then a divorce while I had a husband with a failing business that I was not a part of (I was merely an employee – not part of the business part of things) and a divorce. But I think the moral of the story is the same. You need to protect yourself and make sure you are prepared for any situation. You may think you know your partner, but things change. Business puts so much stress on your relationship. You change, your partner changes, and you are so busy that you may not even notice until it’s too late. Too late to fix things, too late to remain civil and act like grown-ups… Then what?
Believe me, it’s not a good place to find yourself in.
If you have a story and you want to share with the world to help inspire others, just post in the comments below or reach out to me and I would be happy to add it here. I want to help as many people realize how uber important it is to have a partnership agreement in their company!