By Kisha A. Brown
I had a friend who asked me to join him in building his business. I suggested we create an agreement outlining the terms and specifying my role and responsibilities. He dragged his feet and never responded with details. Things were going well until they didn’t. When we had a disagreement it shattered our business and personal relationship. I knew better.
It happens to the best of us and this is why it’s so critical to formalize arrangements when money is moving and decisions are being made. It’s not about whether you trust someone or trying to avoid the discomfort of a hard conversation, it’s about ensuring that the small stuff doesn’t break down the bigger vision. And there will always be small stuff.
When good deals go bad it’s usually because of one of three things:
- The agreements weren’t structured properly. Every contract you sign is written for the benefit of the person or company who gave it to you. It doesn’t mean it’s a bad contract or that they have malicious intent. It means that the contract wasn’t written from your perspective and could be extremely one-sided.
- Assets aren’t protected. You built it but you didn’t capture the value of your curriculum/course/manuscript/report and now someone else has ownership rights to it. I’ve had to walk away from opportunities that required me to forego ownership over my content. Short-term money isn’t always worth losing long-term rights.
- Obligations aren’t clearly defined. Everyone was on the same page when things were going good but the minute conflict arose the rose-colored glasses came off and no one could see who was supposed to do what. When each party’s expectations are in alignment with their roles and responsibilities, things run smoother.
One of my most consistent advice to business owners is to get legal clarity regarding their business affairs. Let me be clear: if you’re in business, you have legal matters before you – whether you recognize them or not.
Having a lawyer walk through your good deals before they go bad is what keeps you from going under when the small stuff hits—as it always does.
The opinions expressed in this commentary are those of the writer and not necessarily those of the AFRO.