Deciding Who to Launch a Business With
May 8, 2015
Many people want to know who they should start a business with and who their partners should be. It’s with the very phrasing of the question that I take issue. Partners – plural?
Do not start a business with more than one other person. Three is a crowd in a start-up more than any other place. My general preference is to tell you to go at it alone (as long as you have a reliable team of advisors and mentors), and forget the partner. Honestly, if you don’t need them, get rid of everyone else and do it yourself. Partnerships in business are different than other partnerships. In the first place, they’re way harder. Business partnerships are, in many ways, more challenging than marriages or life-partnerships.
At the very least, if you are going to have a partner in business, clearly delineate roles and responsibilities, expectations and equity in a written contract. A friendly handshake and understanding between pals is not enough. Always get it in writing. In addition to being a good longterm practice for all of your other dealings (i.e. always get it in writing), if those expectations aren’t met, you have something to lean on. Built into this contract should be a plan for parting. It is exceedingly likely that one of you will tire of the business or the idea, be begged by a significant other to get a “normal” job and quit, or simply grow to hate and resent the other business partner.
This is not meant to be negative or cast gloom on the excitement of starting a business (yay!) – just to be practical about the likely outcomes and ensure that a plan is in place going in. Sometimes, that’s what will save the friendship longterm. Friends or no, at the very least you don’t want to get stuck owning half of a business that only you’re working on. You’re already giving a chunk to Uncle Sam, so by the time you pay a useless partner or buy him out, you’re pretty much taking home only a quarter of what you’re dedicating your life to. So, yes, if you can, skip the partner, and if you can’t, get the agreement in writing.
Now, let’s say that you need a partner for any number of valid reasons (and, no, being scared to go it alone is not a valid reason). In this case, there are three primary criteria that you should use to select your partner. Your partner needs to:
- Share your vision,
- Have a complimentary skill set to yours, and
- Be the hardest working person you know.
In the first place, if you and your partner don’t agree on the direction of the business and what you’re trying to accomplish, then you obviously aren’t going to make a longterm go of it. Please be realistic and see that. If you don’t, you’re likely not cut out for this life and certainly not along with your chosen partner.
In the second place, you need to make sure that you have a complementary skill set to your business partner. You don’t want to split a business with someone who isn’t bringing something to the table that you can’t (and just because he is doesn’t mean you want to give him equity if you could just pay him a fair salary). For instance, if you are a developer then your partner should be great at sales. If you’re an expert at the customer experience then your partner should be good at logistics. And so on. Seek a partner with complimentary skills. Don’t start a business with someone else who can do what you do because you’ll end up giving half of your business away to a third person you need early who can do some other crucial thing well.
Finally, make sure your partner is the hardest working person you know (and do some self reflection as well to confirm that you’re at least as hard working). Almost nothing takes as much dedication and hard work through thick and thin than launching a business. If you can’t say about the potential partner that this is the hardest working, most determined person I know then do not work with him or her.
Do you have other advice about how to decide who launch your business with? Please share it with us.