There are a few big questions we ask or get asked in our lives.
- “Will you marry me?”
- “Do you want another kid?”
- “Do you accept this job offer?”
The one that often gets overlooked is
Business Partners are great. You double the ideas. You share the risk and the reward. You split whatever comes your way right down the middle.
Whether you are beginning a side hustle or a creating a start-up venture, the partner you select will set you on a trajectory for success or failure.
It is natural to look at a friend or family member and say, “Yeah, let’s go into business together! You like me. I like you. Let’s do this!”
It’s not that simple.
A business partnership is founded on 3 bedrocks.
Bedrock #1: Integrity
Going into business together means you’re going to be relying on one another to make sound financial decisions and operate within the law. You are representing them. They are representing you.
It seems so simple, but if you can’t trust your partner to act with high integrity 100% of the time, you will not succeed together.
Bedrock #2: The Why
There’s a reason why you want to start a new venture. That’s your why.
What’s your partners why?
It is imperative that your why and your partner’s why are in the same zip code.
If you’re in this to earn money right away, but your business partner wants to earn a big paycheck at the end – your why’s are not in the same zip code.
In that scenario, you will want to make decisions that are better for the short-term, while your partner will want to make decisions that are better for the long-term. Conflict will arise. Trust will erode. The venture will not prosper.
Bedrock #3: Equity Equality
There are 2 types of equity you and your partner will put into a new venture: Sweat Equity and Financial Equity.
Sweat Equity is the number of hours you spend on the venture.
Financial Equity is the number of dollars you spend on the venture.
It’s important that both of these are equal. It shows that you’re both in this together – fully committed.
An unequal balance will be OK at the beginning. The newness and excitement of the venture will overshadow the inequality. With time, the newness will wear off and the inequality will come to the forefront. This can lead to frustration, conflict and dissent.
Perhaps the business partner you have in mind checks these 3 boxes. If so, go for it! If not, proceed with caution.
A business partnership will never be perfect. You don’t have to align on everything. In fact, if you do agree on everything, that’s a red flag. You need different styles of thinking and you need to challenge one another at the right time.
Starting a new venture is bold, courageous and fun. It can completely transform your life. Go find the right business partner and conquer the world!