Choosing who you do business with is setting your company up to thrive or fail. Most of the time, a business can fail from a simple misunderstanding or mismanagement of funds.
Looking for a business partner or choosing to go into business with someone can feel like it makes sense.
You have a sense of support; someone else can bring a fresh perspective to your company and might have strengths you don’t. But equally, you’re responsible for their bad decisions too.
Would you trust the person you are about to enter a partnership with, with your bank account? What about with your pets? Think about how deeply you trust them to make the right decision.
If you can’t say you trust them in all business matters, this partnership is a non-starter.
And that is okay.
Friends and Family
It’s not uncommon for friends and family to go into business together, but sometimes the disagreements can impact the relationship permanently.
Other times, the combination becomes an unstoppable force. It’s hard to tell what yours will look like.
Think about if the person in question has the same life goals, financial goals, and work ethics that you do.
And see if their strengths and yours make sense.
Will they be around at 2 am when you research funding options, advantages and disadvantages of share capital, and the most beneficial shipping options? If not, they are not the partner for you.
Test it out
One of the most exciting ways to see if it will work out is to test it. Create an aide project for you both to work on, and see how it goes.
Make sure that you treat it as if it were your actual business (and if it works out, then maybe it will be).
A trial run can let you and them know if this is the right thing. They might decide that they can’t work with you.
You and your potential partner might have a different idea of what the split of work and profits might look like.
If you are in the office all the time, but they are heading to clients, and closing deals, should the split be 50/50?
It’s something that you’ll need to discuss in detail because it might be that you can’t agree about what a fair split looks like.
Money is usually the make or breaks for many businesses – and talking about it can be just as heated.
If you are applying for finance, do you agree about where the funds should be spent?
A further consideration would be how the profits should be split. Would you put some aside to build the business’s finances and then pay yourselves less? Or is the whole profit (minus taxes and national insurance) split equally?
Great businesses have crumbled under the stress of a partnership that wasn’t beneficial. You must consider all of the different options and how they can impact the business.
The critical point is to remember that you need to be very self-aware here and look at where you have some failings.
Once all that is ironed out, you need to make your business successful: 6 Strategies for Running a Successful Startup