Ever had anyone advice you not to start a business with a close friend? Yes?
Well, They’re right. Having a business partner who’s also a friend can be a nightmare.
I started my first business with a friend and although it was fun, It was a financial disaster.
Here’s what happened.
My first ever business venture was a hair and skin care brand I founded with a close friend.
I was 18 years old when we first launched Chocolate Petal. I believe she was 19. We were both completely in love with our new company.
Working with my friend was good for the following reasons:
- She was extremely passionate about growing our company;
- Work was always fun;
- She always made room for my mistakes and shortcomings and
- She was always ready to make sacrifices to get the job done.
Sadly these are all qualities any good employee who’s being taken care of and paid relatively well would possess.
I’ve learned now that although these are qualities are essential; a good business partner should bring a lot more to the table.
I asked a few friends why they think our partnership failed.
Some said that we just weren’t ready to start a business. Others said we were both too young and immature.
As much as I hate to admit it, I think they were all right to some extent.
Here’s a list of reasons why I think our partnership failed.
- We both had no experience with running a business.
- Communication of expectations and responsibilities was poor.
- We didn’t have any knowledge of accounting and didn’t hire an accountant
- We did not know how to set goals properly.
- Collectively, we had zero knowledge about marketing.
My business partner and I have gone our separate ways. She’s working a lucrative 9-5 job and seems happier than ever while I work from home.
I’d like to believe that I’m happy as well, lol.
Here are some helpful tips on how to choose a business partner.
Someone You Can Trust
This point is essential. I believe picking a business partner should be as crucial to you as choosing a life partner.
You want to go over their spending, decision making, commitment and communication habits.
Similar Goals and Values
Before letting anyone co-own your business, you have to be sure that you have the same goals and values.
You’ll have our differences, but it should never be about things like taking bribes or whether or not to perform a social responsibility you’re passionate about.
Your differences should also not be about how far you see your business going. You need a partner with a billion dollar mindset.
A Person You Can’t Just Hire
Some entrepreneurs give out significant stakes in their companies to people that they can hire as employees or consultants. I almost made this mistake. Thank God for Pamela Wasley’s article on Entrepreneur magazine.
Strong In Areas You’re Not
An example is the fact that I’m awful with knowing how money goes in and out of my business. I need someone who’s good at that. This doesn’t mean that we won’t hire an accountant. Again, It’s just an example.
For you, it could be someone who’s good at marketing or someone who has experience with getting investors for businesses. Whatever it is, figure out your weak points and find someone who complements you.
A Responsible Person
The last thing you want is to keep having to remind your business partner to attend to their own responsibilities. You need someone who knows their responsibilities and gets the job done, in time.
You should both know your roles and how to delegate tasks to your employees.
My final advice for picking a good business partner is to have an agreement on how funding will be spent and how to distribute profits.
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