Do This Before Starting a Business Partnership
So you’ve been thinking about about starting a business, but don’t want to be a solo entrepreneur. This, of course, means you need to find a business partner. Most likely you’ve already considered the type of business, which helped you decide which friends or relatives would be a good business partner.
So, who will you choose to join you on this new adventure? Choosing someone this close is often a good idea, because you already know the person quite well. You know their good points, and you know their not-so-good points. You also know what they do that annoys you. If you haven’t yet, I highly recommend that you consider all of these, as it will help you choose the best fit. Remember, you will be working with them day in and day out, 24/7, 365 – at least at first. Once you’ve weighed all the pros and cons of those who would be a good candidate as your business partner, you’re set to move forward with your plans. More than likely, you’ve already had casual conversations before your “official” offer, so they won’t be surprised that you’re ready to move forward with your plans.
The next step is probably the most difficult task.
It’s time to have “the talk.” No, not that talk!
This talk is one where you both will need to be straight forward, blunt even. You will need to lay out all of your feelings, your reservations, your expectations.
Business partnership with a friend, relative, or spouse can be a wonderful experience. But without laying the groundwork first, difficulties will most likely arise, often beyond repair. What do you need to discuss? Luckily, My wife and I had many long conversations about being business partners prior to starting a home inventory business.
There are many topics to cover, but here are some very basic areas to be addressed before you go any further:
- Who will have major ownership – if you are 50/50, and there is a disagreement, a stalemate could cause failure. Someone needs to have the final say.
- Who will fill what role – consider your skills and decide who will be responsible for the daily operations of sales & marketing, who is in charge of the financials, etc.
- Set parameters – There will be disagreements, so decide now how these will be handled – by vote, by the person responsible for that area of the business, or by the one who has major ownership of the business.
- What reservations you have – and you will have reservations, no matter who your intended business partner is. This is the toughest part, as you will be required to be more open and honest than you have ever been. You need to get though any issues that you think just might come up, and face them now. Can you work together? Do you want to be with this person all day, almost every day? In the beginning, at least, you’ll most likely live, eat, and sleep your new business.
As I said, there are many other things that will need to be discussed. But if these topics aren’t fully discussed, and firmly agreed upon, you are probably in for a bumpy ride. A small aggravation could turn into an insurmountable difficulty. Take precautions up front. It will save a lot of arguing and disappointments. It could even save a friendship or a marriage.