Starting a business with a partner? 5 conversations to have before getting started
By Stephanie Cartin
Courtney and I get asked all of the time how we have been able to make our business partnership thrive over the past 10 years. We have had so many learning lessons over the years and there are many things we wished we knew when we were first starting out on our journey as partners, so we wanted to be sure to share them with you.
If you’re starting a business with a partner, here are 5 things to think about or have conversations around getting started so that you are set up for success:
Align on a vision
Make sure you and your partner are aligned on what the ultimate vision is for your company. Have conversations up front about what success will look like for you individually and together. You’ll want to discuss where you each see your business in 1 year, 5 years, 10 years, and beyond. Think in advance about the future of the company – do you ultimately want to sell your business, or are you building a business together that you will want to hold onto for years to come? You may not have all of the answers on day one, but you want to be sure that your vision is aligned.
Be sure to also discuss the financial aspect of the business – determine what you’ll each be taking as salary and how much profit you’ll want to put back into the business to grow it. Many times, not seeing eye to eye on how much to reinvest in the business can cause a major conflict and its important to be aligned on how much you want to reinvest each year.
Clearly define roles and responsibilities
Something that has truly helped us in our partnership over the years is that we have complementary skill sets and we were able to divide and conquer our responsibilities in the beginning when launching our first company. Create a Founder job description for each of you and determine what you will each focus on. While there will be things that you will have to do together, try to clearly identify where your strengths are and what you will each be doing.
As the business grows, review what you are each doing every year and determine if the responsibilities are divided fairly based on what your equity splits are and have open conversations about that.
Create an operating agreement for your company
Having a business with a partner is like a marriage. There are legal documents that go along with any partnership and it is important to set up an operating agreement when you are starting your business. The agreement will outline how the operations of the business will be governed, and together you will need to make decisions about many of the “what ifs” for the future of the business. Be sure to invest in a great business attorney who can work with you to create an operating agreement that works for your business(es).
Have tough conversations up front
It’s important to think about the “what if”s that may happen in life and in business before you get started. You will benefit from talking through what may happen if something happens to one of you, or if someone decides that they do not want to be part of the business anymore. It could be a conversation about how you will manage the business if one person has a baby and needs time off or if one of you gets sick. Talk about how you both would want to handle these situations up front so when or if these things do happen you have already determined the steps you’ll need to take. Some of this may be included in your operating agreement, but you should be able to have these conversations with your partner on a continual basis.
Hire a business coach
One of the best things we did when we started our first business was hire and invest in working with a business coach. We often refer to her jokingly as our “marriage counselor” as she helped us navigate conflicts and tough times. Our business coach also helped us stay aligned as we’ve navigated running different parts of the businesses we’ve developed over the years and has helped us realized that it’s important both partners have the same priorities. Another benefit of working with a business coach when you have a business partner is you have a built in third party to help you think through decisions you’re faced with as they come.
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