Business Plan for Partnership Firm
A business plan for partnership firm is recommended for anyone entering into a business partnership.3 min read
Updated November 2, 2020:
A business plan for a partnership firm is recommended for anyone entering into a business partnership. A business partnership is two or more people working together to run a business. Each person takes on equal risks and rewards that come from the business. A proper business plan is ideal for handling current and future business decisions.
Steps For Planning a Business Partnership
- Write a mission statement to clearly state the direction and goals the business plans to take. By writing a mission statement, the partners agree to the company's direction now and in the future.
- Develop a reimbursement plan for the costs and investments incurred during startup. The amount of money provided for the startup is not always equal. Therefore, it is beneficial to make a plan that takes this into account with repayment and returns on investment. Avoiding arguments over the value of the startup amount versus levels of sweat equity will be removed with a reimbursement plan.
- Create a method to resolve partner disputes. If an odd number of members are part of the partnership, you can choose to vote democratically. In the case of two partners, the partners may split areas of the business having the final say. For example, one person can make final decisions on marketing and sales planning, while the other person makes final decisions on financial planning.
- Appoint an outside panel of advisors, or ombudsman, to resolve any internal disputes. Trusted experts should always be used to avoid ruining the partner relationship.
- Divide all the responsibilities of the partners related to labor and management and assign the amount of compensation they will receive. The compensation is not always equal based on the workload the partner takes on.
- Request that outside experts review the partnership agreement for any legal or accounting mistakes. The experts may be able to point out unknown problems that exist in the agreement. This review should take place before the partnership begins business operations.
A partnership deed and partnership agreement are the same, but the partnership deed is in writing. A partnership agreement can exist solely through verbal communications or actions. A partnership deed is recommended for businesses as it clearly defines the terms of the partnership.
The partnership deed helps prove the agreed-upon terms if there are any conflicts. Without a deed, the rules to settle disputes will fall to the state laws where the partnership exists. This creates another issue where one partner may file suit to benefit from the existing laws. Legal action can be avoided with a partnership deed that lists all details of the business that the partners agreed to when they began the business.
Partner Business Plans
When legal firms are looking to add a new partner, a well-written business plan that shows the new partners' intent to grow the business will make them stand out from the rest of the applicants. The business plan should exceed the expectations of the firm.
The key elements of the business plan are:
- Create an introduction that details your professional history, areas of expertise, and why you are the right fit for the firm.
- Provide market research and analysis of the needs of the local area, what competition exists, and why the firm offers the best way to reach this marketplace.
- Describe your current client base, prospective clients, and untapped areas you'd like to reach.
- Include any cross-selling opportunities that exist with current and prospective clients.
- Share ways you can develop business sources including publications, speeches, client seminars, newsletters, and similar.
- Explain your long-term strategy to meet the goals and targets that will benefit the firm.
- Show a history of collections, billing rates, and billable hours and projections for the current year, three-years, and five-years.
- List the resources that will be needed to meet the goals of your business plan including:
- Time the partners must invest.
- Key staff will be needed (paralegals, secretaries, etc.)
- Travel expenses.
- Marketing materials,
- Foreign language skill requirements.
End with a conclusion that is creative recaps the important points in the plan, what value will be added to the firm, and why you are the best fit for the firm.
If you need help with a business plan for a partnership firm, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.