In the beginning of any business there comes a point when a decision needs to be made whether to take on a partner or go at it solo. In those early stages it is easy to get so excited about an opportunity that potentially fatal questions are never even discussed. You may be contemplating partnership due to finances or because someone has skill in an area that you lack. Whatever the reason, it is important to go into your venture with eyes wide open.
Partnerships can be extremely rewarding with open and honest communication up front. If you have a partner already, it is still worth sitting down and discussing some hard questions with them. Weigh all options by considering these six important issues.
How you and your partner handle your personal finances affects the business. If one of you expands your lifestyle where more money is needed, there will be tension in wanting to take more money out of the business. Set clear, precise percentages or dollar amounts with the amount of salary each of you will take out. Only enter into business with someone that has control of their personal finances.
If you have any personal relationship with your partner beforehand it will get confusing. Life bleeds into all areas and you need to be conscious of what hat you are wearing when communicating with each other. State when it is a personal conversation and when it is business. Don’t manipulate the personal relationship with business. Be clear, conscious, and precise when communicating.
This needs to be discussed on the front end. If one partner wants to buy the other out, how much will it cost? Under what conditions will you sell? One partner often will be ready and eager to sell when the other is not. Up front, discuss under what conditions the selling or buyout will happen. Write down and sign to avoid unneeded tension in the business. Plan the exit before you begin to make when and how to sell seamless.
What each other will be paid and how you will exit are only a small piece of the unspoken expectations you need to discuss. You need to bring all the unspoken things to light. This includes what each other’s role will be in the company. You may have a higher energy level than your partner. Is there an expectation of the amount of hours each person will work? Set expectations up front to have a fruitful partnership.
Planning for success is extremely important. Often we jump into business and don’t discuss what will happen if the business explodes. You need to make sure that you and your partner have the same vision of success. If one partner wants to expand and the other is satisfied with the current position, you will have a festering problem. Make sure your vision aligns before entering into a partnership.
In a healthy partnership you will be amazed at how close you become. In all actuality you are knitting your lives together. Every action you or your partner makes affects the other. This brings you closer to each other when it is thriving. Someone is there with you to grieve losses and to celebrate victory. Your business partner will become family and you will be united in life with them.
Whether to take on a business partner or not is a tough choice. Make sure to write everything down so that you are always moving forward in unity. Embark on this journey with eyes wide open knowing that personal life and business are never completely separate. There is no such thing as a silent partner. Define up front, take time on the front end, and save heartbreak and frustration on the backside. Move with clear communication and it will be the start of a fruitful partnership for years to come.