CEO’s Agenda

Do you need a Business Partner?

3 Basic Questions to ask Before Incorporating

Everyone wants a partner in business. Why? It seems like it could be more fun, easier, and that partners could fill the gap in skills that you don’t have. These are valid reasons. However, in the last 12 years of working with Entrepreneurs, we find most who want partners can’t articulate why. Here are three basic questions to ask yourself, and your potential partners, before spending money on a lawyer to incorporate your business together.

1. Who will Do What?
Companies do not need two people at the top who do the same thing. They don’t need two who are both good at sales, both good at operations, or both good technologists. Companies need all facets of the business covered and each founding member needs to be able pull their ‘weight’ in their area of expertise. Does everyone who is being considered to be a partner have a unique ‘offering’?

Potential partners must be able to articulate what ‘job’ in the partnership they intend on performing, and what values or skills he/she brings to the partnership. Conversely, each potential partner should be able to clearly explain what his ‘partners’ will be doing in the company and how each of those roles is unique.

2. What is the Distribution of Work?
Generally, there are four pillars of business: Marketing, Sales, Operations and Administration. Inside these pillars are four processes that make up the business of the business and include New Product Development, Sales, Delivery, and Customer Service or Post Sales. So, which of the partners will:

To be successful, these duties and percentages must be defined.

3. Can the Business Hire this expertise?

a. If the business is predominately one person’s idea, ask yourself, do you really need a partner? Could you hire these skills through contractors, interns and, in the future, loyal employees?

b. Could you make the business work if you formed this partnership and your partner suddenly leaves you (dies, moves, quits)? Would the company fold without your partner?

Do you ‘just want’ a partner? Some people love the idea of having a partner, so even though their answers indicate they don’t need one, some just want to be part of a ‘partnership’. This is ok, but must be recognized for what it is. We’ll be talking next about Partner Questions to ensure success if you do partner up!

If you can answer all these questions, and still feel excited about creating a business partnership, go see a good business attorney. A good attorney will have a many other questions to help you prepare to be successful! If you need a referral, call or email us at info@business-concepts.biz and we can refer you a list of the ones we have used and liked.