The importance of changing a shared vision in short term is an important issue for building a solid hair corporate partnership. Many entrepreneurs is so exciting that forget to consider the incompatibilities with their new partners. You and your partner should work towards the same business goals and how to achieve them. In your action plan, make sure that you and your partners are on the same page to achieve your vision and how to achieve your business goals. You should make your vision for your hair business in advance.
Avision statement is a clear expression of your hopes and dreams for the future, a symbol of what you want your business to do, and how you view is as going forward. Your vision statement should provide guidance and clarity, and expand your imagination for your future hair business.
Projects for the next 5 to 10 years Big Dreams, Focus on the Success of Hair Career Use the Present Tense Use Clear, Simple Language Make Your Statement Passionate and Emotional Keep IT Aligned with Your Business Values and Goals.
1. Project 5 to 10 years in the future
2. Dream big and focus on the success of your hair business
3. Use the present tense.
4. Use clear, concise language
5. Make your statement with passion and emotion
6. Keep it aligned with your business values and goals
7. Make a plan to communicate your vision statement
Creating the Wrong Partnership Business Structure
It’s a legal form of business operation to share ownership and profits with a partner. There are many partnership structures, the following three are the common business structure, a general, a joint venture and limited partnerships.
General partnership is a form that two or more people agree to go into business together to make a profit
You don’t have to put anything into writing or file anything with your local government with a general partnership. The difference between a general partnership and other partnership business structures is the joint liabilities of everyone in the partnership. A general partnership will allow all partners to split all profits, managerial responsibilities and liabilities for debts in equal proportion among everyone. Make it in the legal partnership agreement if you plan to share profits or losses unequally to avoid disputes in future.
A joint venture is a form of a general partnership that remains until a specific project completed or a particular period elapses that everyone agrees upon.
Limited Partnerships have at least one general partner and one limited partner. The limited partner has limited personal liability
This means that partners are only responsible for the debts of the company to a certain extent. This partner has no direct say in daily operations or partnership of the hair business, it’s silent and contributes money to the hair business. Limited partnerships won’t receive tax at the business/corporate level to avoid double taxation.
They are only to be reported on the personal tax returns.
Let’s see the steps to form your limited partnership to avoid mistakes for everyone involved.
First, you and your partner need choose a name for your business, most states require a form of register name as "Doing Business as"(DBA).
Before naming your company, you’d better to search your local Secretary of State office database to be sure that your hair business name is not the same to another business. Also make sure to check out that your hair business name does not violate any registered trademarks with the U.S Patent and Trademark Office.Draft a Limited Partnership Agreement
This step is highly recommended though it’s not mandatory in most states. Standard terms are allowed for partnership agreements for a limited partnership. Make sure to check with your state’s requirements as partnership legislation varies from state to state. Partnership
Standard terms include in your hair partnership agreement:
1. Partnership Information
a. List the name of the partnership, location, when the partnership formed and the purpose of your hair business.
b. List the partners name, addresses, and Social Security Numbers
c. Partners’ capital contributions
2. Profit and loss distribution
It must be clearly stated in the agreement that each partner’s “distribution percentage” as this will reflect their share of partnership profits and losses in future.
Who Will be Your Registered Agent?
Having and continuously maintaining a registered agent are required in some states. The registered agent must be a resident or a business entity that is authorized to conduct business in your state and have a physical street address in the state. In this case, you may act as your own agent if your hair business is in your state.
File For a Certificate of Limited Partnership
The certificate normally requires necessary information regarding your business which includes entity address, agent name, and address, names, and addresses of partners in addition to other information, it depends on the state you filling. You can find the certificate and forms online at your Secretary of Sate website.
Register for an Employer Identification Number
An EIN is required to open your business banking accounts to hair employees, or to make business transactions. You can file an IRS Form SS-4 or apply via the IRS online application to apply for an EIN. The EIN also be knows as a “Federal Tax Identification Number”
Obtain a State ID Number
Some states require you to file a state ID number. Like your EIN, this helps identify a business for tax purposes. If it is needed, they are available via your State’s Department of Revenue.
Obtain Required Licenses and Permits
Permits and or licenses for specific companies to operate legally are required by Federal, State, and local authorities. You can find a useful database of federal and state business licenses and permits at the U.S. Small Business Administration website.
To avoid the personal assets risk of being affected by any reason, you’d better get protections of carrying insurance for the unexpected such as:
Property and liability coverage
Wl ho is Allowed to Do What Rules
Figuring out the rules on who is allowed to do what is another common mistake to avoid before entering a hair business partnership.
Who is going to manage the partnership, who can sign contracts are the rules you and your partners should determine, rather or not partners will be receiving salaries for labor and services. Wages do not have to be made proportionately to the partners, it can be reflected according to their working load.
Determining the voting rights of partners are also an easier occurred mistake when forming a partnership. It should depend on the different situation that you will face. The situations such as admitting new partners, merging with another company, selling part of the hair business, or filing bankruptcy need a unanimous vote. A simple majority vote of the partners will suffice on some other common daily issues like what happens and what doesn’t.
Everyone assumes everything will go according to plan as planed and all partners are performing their duties as agreed, but this is a common mistake you should avoid before going into your hair business partnership because not everything will happen as you wish.
Thus, it’s important to write out the “exit strategy” for everyone involved in the partnership in your partnership agreement.
You may also want to create a “someone else” clause to the last three situations above.
If the last three situations above happen, the departing partners share of the business will be an asset that may be transferred by law to someone else (deceased partners heirs or an ex-partners spouse) instead of automatically getting divided between the remaining partners.
You may insist on a buy/sell clause that specifies the other partners have the right to buy out that “someone else” in the last three situations above, then you should specify the method of determining the value of the departing partner’s shares.
Everything should be listed clearly.
Rushing into the partnership
Partnership is not a moment of enthusiasm. Review the pros and cons of your partnership before committing.
Going into business with your friend
If you can balance the relationship between friend and work, it’s a great idea to go into business with your friend. However, if personalities clash, you may be headed for trouble in your business. The significant advantages of business partnerships are sharing risk and having complementary skill sets. Agreeing on social things and business aspects are two different things.
So, it’s up to you how your relationship will change when work with your friends.
Overpromising and saying yes to get the deal done, or partnership is going is another common mistake to avoid before entering a hair business partnership.
Being able to keep promises is one of the most critical factors in building a professional reputation, especially in business. If you don’t keep your promise, people won’t take you seriously, and finally stretch you to thin.
Lack of Communication
Lack of communication can be three kinds: no communication, miscommunication, and over-communicating.
Be honest and direct with your hair business partners, work together towards your goal.
Not using your individual strengths
One of the advantages of forming a partnership is using the skills and strengths of each particular partner, thus assign the proper position for each partner to allow each partner to focus on your strengths.
Lack of Trust
Make sure that you form a partnership with someone you can trust professionally as well as personally. An honest and open relationship between partners is a foundation of any successful business partnership.
Find The Right Partner
It's imperative to have a comprehensive agreement for all the details such as finances, division work, and clear rules for every partner.
Whatever close your personal relationship with your partner is, a simple handshake and verbal agreement will not suffice when your hair business name, funds and reputation is on the line. If done correctly your hair business partnership can be rewarding, but unsuccessful collaboration will permanently destroy the relationship. So, if you want to build a successful business partnership, be sure to avoid the common mistakes listed above before entering it.
I sincerely welcome share your successful experience in partnership with us and if you ever entered a failed partnership, let us know about the failed experience to avoid. Wish your best hair days be ahead of you! JC Hair Factory is one of professional wholesale virgin hair vendors in China for more than 15 years. We offer wholesale Brazilian hair to our clients for worldwide markets. Welcome!!!