Have you ever considered bringing someone in as an art gallery business partner to work with you? Perhaps you run your gallery on your own right now, but you wonder if having a partner to share the responsibilities or bring a new strength into the business would be a good move. Maybe you are planning to open a gallery and working through how best to structure your organization.
In this article, let’s look at some pros and cons when deciding to take on a business partner to help with art gallery management and strategy.
Successful partnership arrangements can work harmoniously, but when the agreement doesn’t work, it’s disastrous and difficult to repair. While it can be hard to foresee how it will work out until you are both actually working together.
A little preparation can help to set you up for success before it’s too late.
Benefits of running an art gallery with a business partner
You’re not alone managing the gallery with all the pressure on your shoulders.
It can be so helpful to have someone equally invested in the gallery’s success to bounce ideas off of and collaborate with you on growing the business. The critical thing to remember is that the partner must bring more to the table than just someone to discuss strategy. A business advisor can also do that without sharing in the profits.
A partner could bring complementary skills and personality to the business.
New skills to the business from a partner should complement yours, not just fill a void. You can learn new skills if needed. A partner should bring new efforts, expertise, and complementary skills to the gallery.
Complementary personalities also have benefits. One of you might be more extroverted and outgoing with people, and the other might excel in developing organization and project management, for example. These kinds of skills are often in people with different personality types.
Risk allocation in the gallery business can be shared between partners.
Sharing the risks of running an art gallery business today can be a real advantage. Of course, you will want to protect your personal assets as much as possible. There are several types of partnerships you can legally form. Consider forming an LLC partnership that allows each partner to avoid personal liability.
If your art gallery is already structured as an LLC with sole proprietorship, speak with an attorney to help you convert to an LLC with multiple members. Your situation and needs will dictate what type of partnership entity is best for your gallery business.
Negative aspects of having a gallery business partner
Now let’s look at some of the things to keep in mind before asking someone to partner up with you that may not be that great.
A percentage of the profits would go to the partner.
Are you willing to share? You need to consider if a partnership would eventually allow you to at least double the financial success of the gallery business. Carefully weigh what they could bring to the table that you couldn’t get from an external gallery business advisor or continuing on your own.
As in any relationship, partners will often have disagreements.
Remember, expenses and profits are allocated across each partner. Should things go south, similar to a divorce, it can get very messy when a partnership dissolves. Protect yourself and make sure that you have a graceful way out.
With a partner, their problems become your problems.
On a similar note from above, if your gallery partner goes through a personal crisis, such as divorce or health problems, it can impact you and the business.
Your decision-making process will likely change.
You’re accustomed to making business decisions for the gallery and taking action. Are you willing to include someone else in the process? Getting a partner’s agreement or considering their perspective could sometimes slow things down. But they could also bring fresh ideas as well.
They might have very different values from you.
Values are essential when entering into a business partnership. While some differences could be complementary, you need to align key business strategies, many of which will be driven by values. Even if you know your potential partner well already, consider some “what if” scenarios where values could play a vital role. Interview each other as you might a job candidate to test if your business values are compatible and as you believe they are.
What to look for in a gallery business partner
Consider someone who is already in the gallery sector or a similar business.
Joining forces with someone who already understands the opportunities and challenges you’re dealing with can make a strong partnership. A merger with an existing gallery can be an excellent way for both of you to move forward and grow quickly.
However, I would advise you both to discuss your motivations for merging and your goals for the new business at length. You must be absolutely clear about what kind of gallery you want to be created and each partner’s expected contributions. If you decide to move forward, work with an attorney to create a partnership agreement. More detail on this below.
Look for a business partner you already know well and can work together.
Many people start businesses with a spouse or BFF. This can often make for a strong partnership because you already know each other’s strengths and weaknesses. You could also look to colleagues from past jobs that you worked well with, trust, and appreciate their professional ideas and management style.
Decisions before moving forward with a gallery partnership
After you have considered all the pros and cons of adding a partner to help you with art gallery management and have selected a potential candidate for the job, you need to work on a few more things before getting a lawyer and accountant involved.
As I mentioned above, it is essential to have an open and honest lengthy discussion with one another before entering into a gallery business partnership. You and your new partner need to decide a few things before moving forward.
- How much, if anything, will the new partner need to invest in the gallery?
- What will the new partner’s interests be? 50/50 or something different.
- Are there any existing loans that should be repaid before a new partner comes on board?
- Who is responsible for any existing obligations made by the gallery?
- How will business decisions be made and disagreements resolved?
- Do you have similar business goals and work ethics?
- Lastly, but most fundamental, do you trust each other.
Creating a partnership agreement
Don’t go into a partnership with just a verbal understanding and a handshake. You must have a written partnership agreement that will help anticipate future events. An attorney can help you protect yourself from circumstances you might never see coming. For example, if your business partner dies, you might not want to be in a partnership with their spouse. Just sayin….
To get you thinking, here are a few things typically covered in a business partnership agreement:
- Name and location for taxes and legal documents of the partnership.
- Defined contributions of each partner, for example, time, resources, capital, and responsibilities.
- Who has decision-making powers, and how are authorities delegated?
- How will you, as partners, allocate profits and losses?
- How will you handle civil disputes when seeking resolution from a partner’s wrongdoing? How will these disputes be limited?
- Process for dissolving the partnership, including death.
To the point
The decision to add a gallery partner is, of course, very personal. You likely shoulder all the decisions and responsibilities yourself, and while change might be difficult, it might also be just what is needed for your gallery’s future success.
Wildly successful businesses have been built by partnerships, but it’s not a silver bullet as they have eroded just as many. Having a partner can be an incredible asset to your gallery business, career, and sanity.
If you enter into any partnership to benefit your gallery business, do so with care and caution. Do the research and some soul-searching. Understanding the complete picture of what you are entering into is vital, but be sure to enlist a good lawyer’s help to set up the partnership agreement.
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