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Have you ever wondered how to form a partnership so you didn’t have to do #allthethings yourself?

In this blog, we’re switching it up a bit from our usual systems and Asana content.

Because we’ve made it our mission to support bookkeepers and accountants of all levels, and building a firm as a partnership is SUCH a valuable business model (that no one seems to be talking about!).

I used to run my own bookkeeping and tax practice called Top Notch Bookkeeping Solutions.

Then, I hired a few contractors to support me, implemented systems and tech, and scaled the business to six-figures.

Eventually, I dissolved that business so I could focus on Workflow Queen full-time! But in the fall of 2021, I realized how much I missed running my own firm.

So, I approached my Operations Manager, Alyssa Truelove, and asked if she’d be interested in partnering with me to launch a new bookkeeping firm!

Since I’d done it all alone in the past, I KNEW I wanted to go a different route this time. Instead of having to make all the decisions for this firm, I was excited to be able to share responsibilities with a trusted partner.

In March of 2022, we officially launched our partnership bookkeeping firm! 🎉

Read this blog to learn what that process looked like, and which steps to take if you want to form a partnership of your own one day!

Our Partnership: Magnetic Bookkeeping & Consulting

At our firm, Magnetic Bookkeeping & Consulting, we offer bookkeeping, financial projections, and consulting.

We chose to niche down and work specifically with online course creators and coaches who’ve reached a level in their business that calls for a solid understanding of their numbers (and what to do with them!).

If you’ve considered niching down, we highly recommend it! Read more about how to do so in this blog.

Once I approached Alyssa T. about starting a new firm together, the process took several months to actually fall into place. So no, you’re not going to form a solid partnership overnight!

If you’re going to go this route, you should ABSOLUTELY invest time and money into doing it right.

In the image above, you’ll see a timeline of the process we went through to create this partnership. (this image was from a webinar we did with Relay a couple months back on how to form a partnership)

Here’s what that looked like for us:

Several months into 2021, I had the idea to start the firm and approached Alyssa Truelove about it. We reached out to CPAs and other partnerships for advice and guidance. Also, since Alyssa Truelove lives in Canada, we had to do extra research to make sure we followed the proper guidelines for both countries.
In December of 2021, we officially decided to form a partnership and started hiring legal teams. We decided to hire our own lawyers in each country and we also hired a joint legal team that would represent both of us in the actual formation of the partnership. Then, we used another legal team to draft contracts for the partnership.
January and February of 2022 was a lot of back and forth with the lawyers, making sure we included everything in our contracts and each partner was comfortable with the terms. We had someone form our LLC Partnership entity!
Finally, we were able to officially launch our partnership and we officially announced the company at an event that we sponsored, called Social Media Marketing World Conference!

Partnership vs. Solopreneur

So, WHY would you want to choose a partnership over running your firm as a single member?

When you are a solo firm owner, you can hire a team and fill leadership roles. But all decisions ultimately fall on you! For some people, this is an ideal setup because they like being in control of all aspects of their firm.

But for us, a partnership was the right call! This way, we can each focus on our zones of genius and balance each other out.

A partnership also means that everything’s distributed. Yes, the responsibilities are split, but you’ll also need to outline how you’ll share the profits. It might not be 50/50, so make sure the distributions are outlined in your agreement.

How to Form a Partnership

Real quick note - we’re NOT lawyers! This is just an example of the process we went through to create our partnership. We recommend hiring your own legal counsel before you start to form your own partnership.

That being said, let’s dive into what steps you can take to form a partnership business model!

Choose Your Partner

It’s kind of obvious to say that you should choose a partner that you actually like. But the qualifications actually go beyond that.

When you pick someone to partner with, make sure they balance you out! This person should have strengths that differ from yours so your partnership is well-rounded.

And even though your strengths are different, make sure you share the same vision and goals for the future (or at least clearly understand each person’s expectations).

Consult Trusted Peers

Now it’s time to turn to others who’ve been in your shoes or can help guide you!

Reach out to other bookkeepers who use a partnership business model and ask them for advice.

Check with a CPA for guidance on how to form your new business entity with the government.

Seek legal counsel for each partner, too! You’ll need individual support as you go through the agreement process.

Consult a Legal Team

We can’t stress this enough.

A legal team is a MUST to ensure that both parties are getting what they need from this partnership. We spent about $5K in legal fees in order to make sure we were both covered in any possible scenario - and it’s totally worth it.

Have them draft a partnership agreement that details anything about how the business will run, what to do in emergency situations, and an exit strategy in case you dissolve.

Document Everything

Finally, you’ll need to create a framework for how you’ll split the responsibilities as the company operates.

Write up a framework to outline who does what in the firm.

For us, that means that Alyssa T. will handle finances, sales, and people for the firm. And I’m responsible for the strategy, marketing, and systems!

When you create your own, be specific. When would all partners need to weigh in on a decision? How will you decide how much money a partner can spend without asking for approval?

Get super detailed when you’re outlining the framework so it accounts for every possible situation.

Is a Partnership Right for You?

Whether you plan to set up your firm so you can eventually remove yourself completely or you just don’t want everything to fall on your shoulders...

Forming a partnership with the right person (or people) could be the best path!

Even if you’re not ready to take that step just yet, our courses and resources can help you create the MOST efficient firm possible.

We support bookkeepers and accountants at all levels of experience. If you’ve just launched your firm, or you’ve been in biz for years - our programs are built specifically to help you streamline for good!

Click on the button below to learn more about our programs and see which one feels right for you!

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