Owning and running a business is not one of the easiest things to do. Running a business requires expertise in business management. Before starting a business, a concrete business plan is required. The plan will give an outline of the operations of the firm. For a business to be successful, it requires knowledge and skills in accounting, customer relations, and management among other skills. Lack of these skills can lead to failure of business. Therefore, starting and running a business is not as easy as it might seem to be.
Businesses can be run by an individual or by partners. A business partnership of 3 might not work out well. Different people have different values and ideologies. Such differences lead to disagreements in decision making. The decision making process delays when there are more than one business partners. Consultation with all the partners is paramount, and they have to agree before making a decision. As a result, the decision-making process takes long. Conflict of interest is likely to arise in a business partnership of three. Each member would like to have their interest met first. A business partnership of three is not one of the best as chances of failure are high.
A partnership agreement is a contract that is signed by partners in a partnership. The agreement clearly states the terms and conditions of the partnership. The terms and conditions include ownership percentage and how to share profits and losses. Such an agreement should also include terms of entry and exit to the partnership, decision-making process and what happens when the partners fail to agree. The agreement should also be written, and all the partners should have a copy of the signed agreement.
Burrow, J. & Kleindl, B. (2012). Business Management (1st ed.). Mason, MA: Cengage Learning.