Partnerships-Think Twice!

Doula Business Advisor

My regular Tuesday blog is designed to support the establishment and long-term sustainability of private doula businesses and doula programs. Excerpted from my book, The Doula Business Guide-Creating a Successful MotherBaby Business (coming Summer 2010).

Perhaps you are considering setting up a doula business with a trusted colleague? At first glance, this may appear to be a good, even fun idea. Certainly if the idea is to share clients and trade being on-call, the advantages to such an arrangement in preventing doula burn-out are clear. In a general partnership, two or more owners share the management of the business, and each is personally liable for all the debts and obligations of the business. Each individual pays income taxes on their share of the profits only. Similar to sole proprietorships, general partnerships are easy to form. Start-up costs may be a bit more if a lawyer is consulted. You can form a general partnership by a simple verbal agreement of involved parties. However, given the not unlikely specter of future disputes, it’s probably a good idea to have an attorney prepare, or at least review, a written understanding or formal partnership agreement. While state laws do not require a partnership agreement, in the absence of such an agreement, state law defines how the partnership is run. Typically this means that each partner shares equally in the profits (regardless of the time or money contributed) and has equal voice in management of the business. A written partnership agreement, on the other hand, will supercede the state’s definition, however, it is not binding on third parties such as lenders, creditors, or dissatisfied clients, who are free to go after any and all partners.

Similar to your doula client contracts, a partnership agreement document is designed to head problems off at the pass. It invites prospective partners to make a cooperative, considered judgment regarding the mutual decision to enter into a partnership and forces them to look at common sticking points for business partners of all kinds. This is a good thing, because there are many pitfalls to partnership.

To be continued next week . . .

Posted by Patty on June 8, 2010 • Filed under Doula Business Advisor (Tuesdays)
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