Should You Have a Partnership?

I’ll be honest, my first reaction to forming a business with a partner is a big “NO!” because I have seen partnerships dissolve as the business starts to grow. At the idea stage it can be very exciting as you share your visions and big ideas. But there are a lot of things to think about beyond the general vision for the practice. 

Legal Structure and Considerations

I’m not an attorney, so I’ll keep this brief. Each potential partner should come to the tablewith their own attorney so you have someone representing your interests. Also consider whether the state requires different documentation for a partnership versus a single-member LLC. 

It’s Like a Marriage

A business partnership is like a marriage, so you have to think of all of the things that need to be done when dividing up "household chores" (e.g., who will do the marketing? What if one of you puts in more effort with that than the other?) and "do you want children?" (when will you be ready to hire, do you have the same short and long-term visions for the business, etc.). 

You have to have all of the tasks written down and divided up--managing the website, marketing, managing finances, social media, paying employees/contractors, etc.). 

Other Things to Think About

1. What are each of your strengths and weaknesses?

2. How will finances be divided between you and how will you decide how often you pay yourself and when 

3. How often will you meet as business partners (not as COTA/OTR or PT/PTA if this is your relationship)

4. Who owns any intellectual property you may create--if you make something for clients, write blogs for your website, etc.

5. What if one of you is unable to work for a period of time due to something unexpected

6. What are your work styles? Does one procrastinate and another plan?Is there anything that would drive you nuts or cause your anxiety to go up? 

7. Do you each have an abundance or scarcity mindset? What about your money mindsets?

8. Review all policies and make sure you are in agreement with how they will be enforced in your business (e.g., if you are going to give grace for one no-show then make sure that is in writing and not something you may be flexible with--it can be easy to want to be flexible when this comes up)

9. What are your expectations and how do you each define success? 

10. How do you handle conflict, including differences of opinion or concerns if and when you disagree on something? 

11. There is a lot more to think about with insurance and finances if you decide to take some insurance (if you are dividing finances by the clients you see, for example, how do you handle a denial or clawback).

An Exit Plan is a Must

We all know that the divorce rate is around 50% in the United States. Business partnerships fail at a much higher rate (around 70%), so an exit strategy is a must if you decide to proceed with a partnership. An exit plan should be part of any agreement you make with your partner and your attorney should help with it. 

Some things to consider in this situation:

1. How will client files be handled if you have an exit? In some states client files must be kept for a number of years after their last session, so this is an important thing to consider to be compliant with those laws.  How would clients be notified if there is a dissolution?

2. Who will get which clients?

3. If you created intellectual property, who keeps that?

This is not an all-inclusive list of things to consider in a partnership, but I hope that it will help you with decision-making. If you want to work with someone you know, consider having two separate businesses and helping to refer to each other. If one of you is a COTA or PTA then you may be able to contract with each other for supervision and evaluations. So, there are ways to work together that make things less muddy, maintain friendly relationships, and allow you full control in your business.