Connect with us


5 Questions to Ask a Potential Business Partner

Most entrepreneurs end up working with another person to make their business dreams happen. However, business partnerships can be tricky. Before you decide to go into partnership, you need to know more than whether this person has good ideas. You need to have a frank discussion about each other’s backgrounds and future expectations. Ask every relevant question you can think of. Here are a few to get you started:

How Much Time and Money Do You Expect to Put In?

Not all partnerships are created equal. Depending on your skill level or how comfortable you feel with certain parts of the business, you and your partner may split up efforts differently. Before you take on a potential business partner, you need to work out how much each of you will put into the project. Talk in terms of money and time because each has its own pros and cons. Even better, hammer out a list of duties each of you is responsible for and what happens if you fail to complete them.
Five Questions to Ask a Potential Business Partner

How Much Ownership Do You Expect to Have in This?

Just as all partnerships are equal, neither are all ownership stakes. It’s not unusual for partners to have different ownership percentages in a business. Sometimes it’s because one partner is putting more equity in the business in terms of time or money. Perhaps the business is one partner’s baby while the other one would prefer to be less involved due to other commitments. Skill sets can determine ownership percentages, too. You and your partner should have a clear idea of who owns what before any work begins.

What’s Your Credit Like?

You may think your personal credit has no bearing on your business dealings but you’re wrong. Startups often have to rely on the personal credit histories of the key officers in the company to secure investors and business lines of credit. In addition to credit, you should have a frank discussion about any criminal past that may come up in during background checks. Investors, vendors, and banks may also run financial and criminal checks when determining whether to work with you. If there’s anything to know, you should know it beforehand.

What is Our Exit Strategy?

Few businesses last a lifetime. Even if yours does, that doesn’t mean you’ll have the same role the entire time. Although you don’t have to have it planned down to the exact date and detail, you and your partner should have an idea of how far you want to take this business. Be honest about what each of you expect to get out of the experience and what conditions would make you ready to move on. Then have a frank conversation about what the exit requirements are. What kind of notice do you require? What are the buyout terms? Is there some situation where one partner can force another to exist? Do the terms change depending on who requested the exit?

When Do You Want to Sign the Partnership Agreement?

You should never take on a partner without entering into a partnership agreement. The question should be when the agreement is signed, not if. Partnership agreements will vary depending on the type of business you’re putting together and the terms of your partnership. Make sure yours has covered every aspect of your agreement. Ask a legal representative to draw it up or approve the one you already have in mind. Hammering out the partnership agreement may take a while but don’t be tempted to move forward while you’re waiting on the terms to be worked out.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Recent Posts

Business3 days ago

Why Is Quantity Surveying Essential in Construction Industry

Quantity surveying is an essential part of the Australian construction industry. It is the process of calculating and estimating the...

Home Improvement5 days ago

How to Maintain Upholstered Furniture

No matter if you have pets or kids, maintaining your upholstered furniture is quite a challenge. Even though vacuuming it...

Business1 week ago

How Do I Find a Good Developer?

Finding a good bubble developer to help build your app or digital product can seem challenging. How can you choose...

Home Improvement2 weeks ago

When is a right time for home repairs?

Summer is a popular time for a renovation around the globe. While it is true that bright days and warm...

Top Alteryx Competitors Top Alteryx Competitors
Tech4 weeks ago

Top 15 Alteryx Competitors

The world has seen a tremendous rise in startups and new incorporations in the business world. Companies have great potential...

Lifestyle1 month ago

Latest Wedding Trends for 2023

If you’re planning on getting married this year, chances are you’re probably overwhelmed and confused when it comes to wedding...

Lifestyle1 month ago

Tips To Make The Most Of Your City Break In London!

London is one of the best cities in the world, known for its quintessentially British culture, great nightlife, fantastic museums...

General1 month ago

The Ultimate Guide To Packing For A Trip To London

London is one of the best cities in the world, known for it’s rich history, quintessentially British culture, the best...

Tech2 months ago

Top 15 Web Development IDEs

The web development field has seen sustainable growth throughout the years. As technology is advancing, so is the web development...

devops devops
Tech2 months ago

12 Key DevOps Programming Languages to Still Popular in 2022

“DevOps is not a goal, but a never-ending process of continual improvement.” – Jez Humble Delivering the finest of services...

Entertainment2 months ago

Festival Fashion Style Tips For 2022

Summer is well and truly here and with that comes the festival season! From the biggest stars performing on stage...

Green & Energy2 months ago

4 Tips For Making Your Wardrobe More Sustainable

Everyone is trying to make more of an effort to make their wardrobe more sustainable, but often are unsure where...

General3 months ago

7 tips on how to organize a budget-friendly move

If you are planning a move any time soon, you might be worried about all the expenses that wait for...

Metal Roof Colors Metal Roof Colors
Home Improvement3 months ago

Metal Roof Colors: How to Select the Best Color for a New Roof

Choosing the right type of material for your roof is enough of a hassle already that the question of choosing...

Health3 months ago

Simple Ways To Feel More Confident At The Gym

If you are new to the gym, or you haven’t been in a while, sometimes you might not feel completely...