You’ve considered the alternatives, gone over the pros and cons, and finally feel ready to make a long-term commitment. No, you’re not deciding whether to get married. You’re taking the plunge into a business partnership.
For many successful entrepreneurs, deciding who to go into business with is as important a question—with as many personal and financial considerations—as a marriage. And, in many ways, it’s a more complicated choice to make. Choose wisely and you and your co-founder could shake up your industry and both make a lot of money (especially if you heed these 20 successful startup strategies). Make a mistake, and you and your bank account will be regretting it for years to come.
So what are some things you should be looking for in a co-founder or business partner—and what questions should you ask yourself when you think you’ve found the right person? Here are 15 ways to tell you’ve found The One (for your new business). And for some great productivity advice, here are 60 Ways to Buy an Extra 60 Minutes Every Day.
“I wouldn’t say it’s a mistake, but you have to look extra carefully if you want to start a venture with a friend,” says Vitaliy Vinogradov, CEO of Modern Place Lighting. “You’re essentially putting a friendship at risk when you start a business together. Typically friends don’t pay attention to each other’s work ethic and skim over a lot of faults they may have. Imagine being in a situation where the business is failing or there is a huge deadline, how do you think they will react?”
“I play tennis and on the court, without even knowing someone’s name, I can tell if we communicate well,” says Vicki Salemi, career expert and author of Big Career in the Big City. “If the other person listens when we’re playing doubles and I say, ‘Got it!’”
Being able to express worries and personal concerns (both verbally and non-verbally) helps strengthen the relationship and the business, and is key to getting through high-stress periods.
“Find people good at the things you are not. If you and your business partner are too alike and enjoy working on the same things, all ‘the other stuff’ is going to get neglected,” says Nathan Kontny, CEO of Highrise.
You need someone who brings all that you’re missing to the table so you’ll become a complete package as a team. It’s extraordinarily helpful to have shared skill sets as well, but you need to ensure all the critical skills are there among the two of you. For instance, one of you—if not both of you—should definitely know these 5 secrets to running the perfect business meeting.
If this is a full-time job for you and a side gig for your partner, that’s likely to lead to trouble down the line. Salemi suggests questions you should ask when considering whether someone could be your co-founder: “What is their track record? What is their vision? Is this going to be their sole focus or do they have other coals in the fire?”
It’s risky to collaborate with somebody who is likely to quickly lose interest, or whom you’ll re-sent later on for working less than you do.
“Basic values aligned is an important consideration,” says Macleod. “For example: Make a profit at the expense of what—environment, animals, relationships/people? What is the single most important reason you want to start a business? This goes to your personal values and needs to be at the forefront of any relationship with a business partner.” And hopefully, you and your co-founder will both possess this important skill that successful people share.
“At the end of the day, you want your partner to be someone that you are excited about being in business with,” says Stuart Snyder, a co-producer of the new stage production of The Exorcist which will premiere in London’s West End in 2017 and Broadway in 2018, as well as co-owner/partner of the iconic 85-year old Beal’s Lobster Pier, who has worked closely with a different partner for both ventures. “You need to be able to trust and respect them and share a common value system and vision.”
“A good business partner is one who is able to compartmentalize discussions and not let it affect the company’s functions,” says Lim. When you do differ on an issue, take it for what it is: An example of differing opinions. Disagreement is natural and frank debate is the sign of a healthy company. You should be able to hash it out, make a decision, and move on. And if (or more likely, when) you or your co-founder get angry, you should both know the best way to keep your cool when you want to lose it. Even if the debate gets heated, you should both be able to step away without hard feelings.
“It’s important to know if your co-founder is living on the West coast while you’re on the east coast. Will that work for both of you and how often will you meet? Or if you’re in the same city, will you work out of an office?” asks Salemi. “If you do have an office, both co-founders should be in the workplace. In case you’re growing a business and you have an office as a central focus point then being located in the office is essential for the co-founder. Why should anybody go to the workplace if co-founders (the key individuals in the business) are not there?”
Of course, if being in the same place is not as high a priority for you and your co-founder and you’ve decided to both work from home, the logistics for that should make sense, too. Beyond location, “It helps to bring in a third party early on in the process, as well such as an accountant you’ll be using for your business and/or attorney,” says Salemi. “The questions they ask up front may also help determine from a business perspective if you’re on the same page.” And while you’re hiring new talent, make sure you keep in mind these 8 game-changing strategies every boss should know.
“The Internet offers you a golden opportunity to really look at this person’s track record,” says Anita Bruzzese, an award-winning journalist who covers careers and the workplace. “You can look at online social media behavior, talk to mutual network contacts and even check public records for previous bankruptcies or (heaven forbid) a criminal background.”
A co-founder who agrees to join you in a full background check should see it as an indication of trust, not doubt.
“Even if this person is a friend or family member, any decision should be made on whether it makes business sense,” says Bruzzese. “Ask questions about how it will be structured, the financial split, etc.”
She suggests using the Small Business Administration as a resource for making decisions about these points.
“Generally, it’s harder, especially for older people, to view each other as equals,” says Vinogradov. “My former partner was about 10 years older than me and always commented about how young I was and didn’t understand certain aspects of life. This, in turn, created a lot of friction.”
That means being sure that a co-founder who is older is not the type to want to demonstrate dominance, talk down your opinion, and take control. If they’re young, they should be someone who doesn’t act it (and maybe you should try this haircut to shave 10 years off your age). Either way, if there is an age difference between the two of you, you should feel confident it won’t create obstacles.
“When someone seems as skeptical as I am, asks tough questions, understands the give and take of an agreement, isn’t overly excitable, and we see eye-to-eye on long-term goals, it makes me feel much better about beginning a business relationship,” says Brandon Crossley, CEO at financial projection platform Poindexter. A co-founder who asks questions is one who will be noticing your blindspots in the future—a valuable trait in a partner.
Once you take into account all these factors, you’ll be on your way to a long-term partnership that will hopefully last a lifetime. Together you’ll iron out how to build your perfect business or successful startup—and if you need that extra bit of motivation, here are 50 inspirational success quotes to jump-start your venture with your new co-founder.
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