Do You Need a Business Partner?
Have you lost time from a bad business deal? What about thousands of dollars? Ugh, what a stomach wrenching situation. You may be losing a relationship with a family member or a friend. This is someone you trusted to build your dream business, and they failed you. They potentially failed employees, your community and your reputation is on the line.
When something starts to go wrong or went wrong, address the problem. Follow your gut feeling with each situation. If you ever feel like something may have been unethical or it may keep you up at night – address it as soon as possible. Communication really is #1 with a business partner.
Here are some pointers to talk about prior to partnering in business:
- Review Personal Finances – how will bills continued to get paid while you are in “start-up”? What happens if the business needs more money? What happens when… anything to do with money. Depending on your business this can be a make or break situation. You want to know your partner is 100% committed. I like to get in depth and ask about accounting software. I think this is important even for personal finances!
- Time Expectations – how many hours do each of you think you will spend on the business weekly. Time can be just as valuable as cash when it comes to a partnership. Think back to high school, no one wants to be in the group with the person who doesn’t do their work….right! Time is important. You need to depend on this person to get their share of the work done in a timely manner. If you are learning like Jason was, time is a great resource to leverage! Working for little to no pay is something necessary to advance personally.
- What about commitment? Do you have other commitments that come first? You should know where each other stand on what you will do for the business and how committed you are.
- How do you act under stress? Are you going to run away when it gets tough? I know that sounds negative, but I can be open about this – I am the WORST broke person ever. I have full emotional breakdowns or get mean if I feel the stress of low bank accounts. If I openly go into a partnership I am upfront about this., but I will do whatever it takes to get the job done to get paid! That is a for sure! Knowing yourself will only set a better relationship with your business partner.
- Put everything in writing! When I thought about going into business with my friend we both brought questions we had to an open conversation meeting, wrote everything down, and if we would have moved forward we would have put it in a legal document. After doing this, we found we were probably better just friends for at least that project! Neither of us were 100% committed to the idea. If anything, we became more close as friends because now we know the ins and outs of each others lives but respect each other in our professional fields and still bounce ideas off of each other for ourselves!
- Do you need a partner? Will you not do your business without one? I find this to be a serious personal soul searching question when I start a project. I ask myself would I do this by myself with or without a partner? If yes, then I think do I need a partner? If so, why do I need a partner? What does this partner bring to the table? Am I just entering a partnership for accountability? *Shameless commercial – I have an accountability program for only $10 a month, no contracts, no long-term commitment. Don’t enter a partnership because you need accountability.
- What happens if everything goes bad? Put in writing what will happen and who will get what, will there be a buyout or just a give it all up? If assets are involved, will those get sold and profits split? List out the whole process on a legal document if something goes bad! Laugh together now at it and hopefully you will never need the document!!
- I think partner meetings are important. I normally do them weekly, but you can spread them out to what you feel comfortable.This is an open communication meeting that everyone should share any good news, problems or concerns. These is a scheduled meeting that all can attend with open communication.
You have covered your ASSets, now get to work! Choosing a partner can grow your company quickly or break you and the company down. If these conversations are too hard to have with your partner, then going into business may not be the best choice for you guys.