21 Fundamental Questions When Considering a Business Partnership
Ah, love! All things good and great in this world are rooted in love. It is the foundation of most modern marriages. The importance of love in human relationships is both romanticized and realized.
What is less romantic, but still realistic, is that certain human relationships are also connections with business, legal, and financial ties. However, this time, we are not talking about traditional marriage – well, at least not for the purposes of this article. We are talking about business partnerships.
There is a long list of celebrated partnerships behind some of the biggest brands today – Steve Jobs and Steve Wozniak of Apple, Amanda Johnson and KJ Miller of Mented Cosmetics, Anne Wojcicki and Linda Avey of 23andMe, Morgan DeBaun, Jonathan Jackson, Jeff Nelson, and Aaron Samuels of Blavity, Ben Cohen and Jerry Greenfield of, well, Ben & Jerry’s, of course. All of these storied partnerships have had their fair share of successes and challenges.
How many times do business partnerships start with love but end in a painful divorce? Potential business collaborators, especially founders, can fall in love with a concept, a product, a vision, or even just the idea of working with each other. But, if the proper business, legal, and financial safeguards are not in place, what could have been a fruitful alliance, or even an amicable separation, can turn into a nasty divorce that goes all twelve rounds.
It is critical to push past the discomfort of uncomfortable conversations and have pragmatic, practical discussions at the outset to protect the professional affection you share. Not all marriages have prenuptial agreements in place, but all business marriages should.
Here are 21 essential questions potential business partners should discuss and memorialize in the form of an agreement before tying the proverbial knot.
1) How do our individual and collective visions for this endeavor align? Where do they deviate?
2) What does success look like and how long would we each be willing to stick with this effort until it happens?
3) How important is personal chemistry and friendship in business?
4) The concept of co-leaders can be complex and challenging to execute well. How would this partnership be different?
5) What are our leadership and communication styles?
6) What are our individual values and how do they tie into our business goals?
7) Do we need pre-business counseling in the form of a business coach or advisor to help guide us through the formation of this pursuit?
Investment and structure.
8) What legal business formations would be best for the company and us individually?
9) How much capital are we each willing to invest at the outset? In the first year?
10) How will we handle any additional partners we may wish to take on?
11) How will earnings or losses be split among the partners?
12) How will we delineate roles and responsibilities?
13) How will we handle conflict?
14) What types of decisions need to be unanimous versus majority rules?
15) What if one of us feels that another is not holding up their end of the bargain financially, time-wise, or in work ethic?
16) How will we address conflicts of interest with any outside business commitments we may have?
17) How will we prioritize this venture with our pre-existing personal and professional priorities?
18) If a partner wishes to depart the business, what would be the financial implications for both those remaining as well as those leaving?
19) Will we have a non-compete clause for any departing partner?
20) How would we handle a complete partnership dissolution?
21) Are we ready to enter into business matrimonial bliss with legal and financial ties?
Like traditional marriages, most collaborators hope that their business partnerships will have longevity and a lasting impact. While there is no guarantee that any partnership will last a lifetime, building the strongest, most viable foundation possible lays the groundwork for a prospering future.
[Related: The Biggest Mistake I Made in Business]
Kelli Wingo serves as the Founder/Chief Vision and Strategy Officer of KMW Catalyst, a leadership development consultancy dedicated to transforming the business experience into the human experience through entrepreneurial culture, employee experience, vision, and strategy. She is also the Founder & Chief Orator of Spiryt in Motion, an oratory company dedicated to dismantling the oppression of limiting beliefs one talk at a time. You can connect with her and see more of her content on her website, Instagram, Twitter, or LinkedIn.
Have more questions? Follow up with the expert herself.
Founder/Chief Vision & Strategy Officer
Kelli [KEL-ee] Origin: Gaelic Meaning: Warrior warrior, orator, strategist, coach, content creator, fire-starter and lover of laughter Kelli Wingo serves as the Founder/Chief Vision and Strategy Officer of KMW Catalyst, a leadership development company dedicated to transforming the business experience into the human experience through entrepreneurial culture, employee experience, vision, and strategy. You can connect with Kelli and see more of her content on her website www.kmwcatalyst.com, Instagram @KMWCatalyst, or Twitter @WarRoomCoaching. She is also the Founder/Chief Orator of... Continue Reading
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