9 Things to Consider Before Forming a Business Partnership

Getting into a business partnership has its benefits. It allows all contributors to share the stakes in the business. Depending on the risk appetites of partners, a business can have a general or limited liability partnership. Limited partners are only there to provide funding to the business. They have no say in business operations, neither do they share the responsibility of any debt or other business obligations. General Partners operate the business and share its liabilities as well. Since limited liability partnerships require a lot of paperwork, people usually tend to form general partnerships in businesses.

Things to Consider Before Setting Up A Business Partnership

Business partnerships are a great way to share your profit and loss with someone you can trust. However, a poorly executed partnerships can turn out to be a disaster for the business. Here are some useful ways to protect your interests while forming a new business partnership:

1. Being Sure Of Why You Need a Partner

Before entering into a business partnership with someone, you need to ask yourself why you need a partner. If you are looking for just an investor, then a limited liability partnership should suffice. However, if you are trying to create a tax shield for your business, the general partnership would be a better choice.

Business partners should complement each other in terms of experience and skills. If you are a technology enthusiast, teaming up with a professional with extensive marketing experience can be quite beneficial.

2. Understanding Your Partner’s Current Financial Situation

Before asking someone to commit to your business, you need to understand their financial situation. When starting up a business, there may be some amount of initial capital required. If business partners have enough financial resources, they will not require funding from other resources. This will lower a firm’s debt and increase the owner’s equity.

3. Background Check

Even if you trust someone to be your business partner, there is no harm in performing a background check. Calling a couple of professional and personal references can give you a fair idea about their work ethics. Background checks help you avoid any future surprises when you start working with your business partner. If your business partner is used to sitting late and you are not, you can divide responsibilities accordingly.

It is a good idea to check if your partner has any prior experience in running a new business venture. This will tell you how they performed in their previous endeavors.

4. Have an Attorney Vet the Partnership Documents

Make sure you take legal opinion before signing any partnership agreements. It is one of the most useful ways to protect your rights and interests in a business partnership. It is important to have a good understanding of each clause, as a poorly written agreement can make you run into liability issues.

You should make sure to add or delete any relevant clause before entering into a partnership. This is because it is cumbersome to make amendments once the agreement has been signed.

5. The Partnership Should Be Solely Based On Business Terms

Business partnerships should not be based on personal relationships or preferences. There should be strong accountability measures put in place from the very first day to track performance. Responsibilities should be clearly defined and performing metrics should indicate every individual’s contribution towards the business.

Having a weak accountability and performance measurement system is one of the reasons why many partnerships fail. Rather than putting in their efforts, owners start blaming each other for the wrong decisions and resulting in company losses.

6. The Commitment Level of Your Business Partner

All partnerships start on friendly terms and with great enthusiasm. However, some people lose excitement along the way due to everyday slog. Therefore, you need to understand the commitment level of your partner before entering into a business partnership with them.

Your business partner(s) should be able to show the same level of commitment at every stage of the business. If they do not remain committed to the business, it will reflect in their work and can be detrimental to the business as well. The best way to maintain the commitment level of each business partner is to set desired expectations from every person from the very first day.

While entering into a partnership agreement, you need to have an idea about your partner’s added responsibilities. Responsibilities such as taking care of an elderly parent should be given due thought to set realistic expectations. This gives room for compassion and flexibility in your work ethics.

7. What Will Happen If a Partner Exits the Business

Just like any other contract, a business venture requires a prenup. This would outline what happens in case a partner wishes to exit the business. Some of the questions to answer in such a scenario include:

How will the exiting party receive compensation?
How will the division of resources take place among the remaining business partners?
Also, how will you divide the responsibilities?

8. Who Will Be In Charge Of Daily Operations

Even when there is a 50-50 partnership, someone needs to be in charge of daily operations. Positions including CEO and Director need to be allocated to appropriate individuals including the business partners from the beginning.

This helps in creating an organizational structure and further defining the roles and responsibilities of each stakeholder. When each individual knows what is expected of him or her, they are more likely to perform better in their role.

9. You Share the Same Values and Vision

Entering into a business partnership with someone who shares the same values and vision makes the running of daily operations considerably easy. You can make important business decisions quickly and define long-term strategies. However, sometimes, even the most like-minded individuals can disagree on important decisions. In such cases, it is essential to keep in mind the long-term goals of the business.

MoS2 Low Friction Coatings – Not Just For The Aviation Industry Anymore

MoS2 low friction coatings (also known as molybdenum disulfide, also spelled, disulphide) are regarded the most widely used form of solid film lubrication today. What makes them unique (with the other dichalcogenides) is the weak atomic interaction (Van der Waals) of the sulfide anions, while covalent bonds within molybdenum are strong.Thus, lubrication relies on slippage along the sulfur atoms. All the properties of the lamella structure are intrinsic. No external form of moisture is required. In fact, best performance from MoS2 low friction coatings is attained in the absence of water vapor, which are prone to surface adsorption. This makes them ideal under vacuum.There are a number of methods to apply MoS2 low friction coatings, including a simple rubbing or burnishing, air-spraying resin-bonded or inorganically bonded coatings, and more recently by sputtering through physical vapor deposition (PVD).Thickness will vary, depending on form of MoS2 low friction coatings, but typically ranges between 5 to 15 micrometer. Sputtering techniques can produce thin films of 0.2 micrometer. While plasma sprays will result in higher builds, beginning at 0.003 inch or more.Friction coefficient less than 0.05 is attainable, but will also vary with humidity and sliding conditions. Tests show friction decreases with increasing vacuum strength. Friction also lowers with higher load, faster surface speed, or both. In fact, MoS2 low friction coatings are superior to both graphite and tungsten disulfide (WS2). Friction with MoS2 low friction coatings is independent of particle size, though the larger particles can carry more load.Dry lubrication for MoS2 low friction coatings remains superior at higher temperatures, with oxidation rates remaining relatively low at temperatures up to 600 degrees Fahrenheit. And in dry, oxygen-free atmospheres, lubricating performance, even with oxidation products, is stable to 1300 degrees Fahrenheit.Higher air flow can affect oxidation kinetic rates in atmosphere. Molybdenum oxide products (MoO3) and sulfur dioxide. Since MoO3 alone offers dry lubrication, based on its relative softness, molybdenum disulfide coating are ideal in higher temperature environments. At higher temperatures, though, they are better suited under vacuum. In atmosphere, they are prone to water adsorption from air based on their hygroscopic properties.As with the other dry film lubricants, while differences may prove negligible, you will have to determine which is better for you: longer wear life or better performance, using MoS2 low friction coatings. Generally, friction will be slightly higher by coating both surfaces, rather than coating one surface only. But wear life will increase coating both surfaces.Friction can be good in so many areas of life. Without it we could not easily stop and start our motion, or change direction. But in moving machinery, friction causes considerable loss of energy, poorer performance, not to mention limiting wear life.As with many non-lubricated systems, the static coefficient of friction is higher than the dynamic coefficient of friction. The resultant motion is often referred to as ‘stick-slip’. Basically, the two surfaces stick together until the elastic energy within the system has accumulated to some threshold, where a sudden, forward slip takes place. Under magnification, it’s apparent the union of two surfaces is often limited to intimate contact only at the tips of a few of the asperities (small scale, surface irregularities). At these point areas, pressures relating to contact may be near the hardness of the softer material. Thus, plastic deformation occurs on some localized scale. This is known as cold welding. Where bonded junctions are formed between two materials.For lubrication to occur, these bonds, this adhesive component of friction, must be broken. And this is where products like MoS2 low friction coatings serve well.So, where are these products used today? Consider aerospace, automotive, marine and electronic, for starters. There, you’ll find MoS2 low friction coatings, again and again.

Ontario’s Wine Industry – Harvesting the Benefits of SR&ED

How wonderful it is to proudly browse the wide selection of Ontario’s wines at your local LCBO. Knowing that your own winery is both a driving force in the Canadian economy and an innovator of the local wine industry can certainly be rewarding, both personally and professionally.From challenges to opportunitiesQuite often the goal of a grape grower to produce a consistent, high-quality brand of wine is met with many unexpected challenges. With the erratic situation of the Canadian economy following the recession, wine makers of Ontario struggle to produce at the risk of manufacturing downsizing. In addition to economic factors, the wine industry of Ontario is faced with a higher stringency under Vintners Quality Alliance (VQA) regulations, and the push from Wine Council of Ontario (WCO) to raise industry standards by participating in programs like Sustainable Winemaking Ontario.For the individual winery of Ontario, keeping up with competition means continuously utilizing new technologies and finding innovative ways to provide a premium product, despite such challenges. Simply put, this boils down to having the necessary financial opportunities become available to maintain a healthy competition. Are these opportunities available to the wine industry of Ontario? Yes – SR&ED is the answer!The SR&ED programThe SR&ED program (Scientific Research & Experimental Development) aims to reimburse companies for their experimental development expenses. For over 20 years and with about $4 billion a year in funding, it remains the largest single source of federal funding for R&D in Canada. The goal is to make creativity and innovation affordable in the Canadian business environment and foster future development.The program is highly relevant to businesses who are naturally involved in shop-floor
experimentation. R&D projects that qualify under the program include (1) work undertaken for the purpose of achieving technological advancement and/or (2) creating new, or improving existing materials, devices, products or processes. The actual refund amount depends on proper identification and qualification of eligible expenditures.Wineries in Ontario serve as ideal candidates for such funding. Typical SR&ED eligible activities that apply to the wine industry include:Developing new wines
Altering soil chemistry
Handling and harvesting technology
Improved bottling techniques
Altering practice as result of the weather
Many more…
Wineries and growers may be regularly overcoming such obstacles in daily operation. Your innovative solutions to these problems may very well qualify you for some SR&ED funding. The program supports any attempts to improve your business operations, even if they do not prove successful.Which costs qualify?Working on new ideas takes time, wastes material and requires equipment modification. The SR&ED program allows retrieving these expenses:68% of wages and salaries of personnel directly involved in R&D
41% of sub-contractor expenses
22% of capital expenditures
The refund has no strings attached – as a winery owner you are free to spend it anyway you like – buy new equipment, attempt new projects, or give everyone a big bonus – the decision is yours!How we can help?Submitting a SR&ED claim is a fairly complex and time consuming process. It involves properly identifying eligible activities within your business, associating the appropriate costs to these projects and completing a highly technical report to support the claim.Using the extensive experience of a professional consultancy like ourselves, business owners have the opportunity to review their potential for qualification, and complete the application process in a few hours, and with no up-front costs. We get paid when you do!Discovering that your business is eligible for SR&ED funding makes a world of difference. The goal is to help your winery take potential technical risks that will eventually lead to significant improvements in your industry.