The #1 Mistake Business Owners Make When Starting Out

The number one mistake I see clients make when starting a business or partnership is trusting a handshake and good intentions. Too many business owners believe they don’t need formal agreements because they’re going into business with family members, close friends, or trusted colleagues—but the truth is, even family members fight. Small misunderstandings can spiral into expensive legal battles, sometimes draining thousands in attorney fees and lost business opportunities. 

Trying to negotiate an agreement after a conflict arises is far more difficult – and often much more expensive – than putting one in place from the start. If you cannot come to an agreement when you’re on good terms, reaching a resolution after tensions flare will be significantly more difficult. As the old adage goes, “an ounce of prevention is worth a pound of cure,” and nowhere is that truer than in business partnerships.  

Before launching a business, you need to answer critical questions: Who controls key decisions? What happens if one partner wants out? How are profits divided? These questions, if left unanswered, can lead to serious disputes. You may think it won’t happen to you, but money and stress are known to complicate even the strongest relationships. In these situations, it’s always better to have an agreement and not need it than to need one and not have it.  

By hiring a lawyer at the start to draft a clear, legally sound partnership agreement, you can protect your business—and your bank account—before problems arise. Those who invest a few hundred dollars upfront on a comprehensive agreement quickly realize it’s one of the smartest business decisions they’ll ever make, ultimately saving them much more in profits and headaches over the long run.  

The Scenarios You Haven’t Thought of—But We Have 

One of the biggest oversights business owners make is failing to plan for the unexpected. You may have a great relationship with your business partner, but what happens if he suddenly becomes incapacitated or, worse, passes away? Without a proper agreement in place, his share of the company could end up in the hands of his spouse—who may have different priorities, a different vision for the business, or no interest in running it at all. You may have worked seamlessly with your partner, but that doesn’t mean you’ll see eye to eye with his successor.  

Without a legal plan, you could find yourself in a costly dispute over control, profits, or decision-making. An attorney can draft agreements that set clear procedures for these situations, protecting both the business and everyone’s financial interests. 

Custom Agreements That Safeguard Your Business 

Every business is unique, and a one-size-fits-all contract simply won’t do. An attorney can craft a customized agreement tailored to your business’s specific needs, covering: 

These agreements are more than just legal formalities; they are roadmaps that help your business navigate both expected growth and unforeseen challenges. 

Without a proper agreement, business owners can find themselves entangled in expensive legal battles, partnership disputes, or forced buyouts with unfavorable terms. Disagreements over profit-sharing, decision-making, and responsibilities can quickly escalate into litigation that drains company resources. Investing in legal counsel upfront can save thousands—if not more—in potential legal fees and damages. 

Your Legal Resource 

At Semeraro & Fahrney, LLC, we position ourselves as trusted advisors for business owners and entrepreneurs looking to protect their investments from legal pitfalls. Our business law services include: 

Whether you’re launching a new business, entering a partnership, or looking to strengthen your legal protections, our team is here to help. Don’t leave your business vulnerable—contact Mark Semeraro, Scott Fahrney, or any other qualified corporate law attorney at Semeraro & Fahrney, LLC for expert legal guidance.