I meet a lot of business owners who don’t have an ownership agreement with their business partners. Partnership agreements can be called different things, depending on the type of entity structure, but common ones are Shareholders’ Agreements, Operating Agreements or Buy-Sell Agreements.

I also meet a lot of people who are considering going into business with a new partner. This is what I tell them – going into business with someone is like getting married to them but without all the fun stuff. And the divorce can be so much worse.

So many times over the years I’ve seen great businesses, successful businesses, shut their doors or otherwise fail because the business owners can’t get along. It breaks my heart. All that work to get the business started and even more work to make it successful, all for nothing. That’s why this is a passion area for me.

The beginning of a business partnership is the most critical and important time. It’s when the relationship gets defined – and it’s the easiest and best time to do that. When everyone is getting along and is optimistic about the future – that’s the best time to put a partnership agreement in place.

The second best time? After you’ve been in business together for a little while and you’re still getting along. You’ve got some experience under your belts and have worked out the initial kinks – now we can define your relationship and put a lasting partnership agreement in place.

The absolute worst time to put a partnership agreement in place? After you’re no longer getting along. There’s not much we can do at that point but to negotiate a separation – which may or may not end up good for you.

Defining your relationship, putting some structure in place so you each have your own “lanes” – can help to avoid problems from occurring. But if they do occur, having some rules in place and a plan laid out gives everyone a clear path forward to resolve the issues in the easiest way possible.

If you have a business partner, I hope you have a good partnership agreement in place.