In part 1 of The “Entrepreneur Conundrum, Do I need a co-founder” series, we discussed how to internally approach the process of determining if you need a co-founder. If you missed part 1, it could be found here. It’s essential that you read the previous article before taking the steps recommended here.
A recent survey by Inc Magazine asked 500 top CEOs, “what were your biggest mistakes in their first year of business?” Unsurprisingly, the top answer was lack of capital, but the answers that followed all touched on “bad partnerships,” the selection of both founders & employees.
It’s been found that over their lifetime, up to 70% of all business partnerships fail. That number seemed somewhat high to me at first, but after some thought, I can see how that could be. On a personal note, I’ve partnered on four different endeavors over the years, and all of those business relationships ended in dissolution. I’m still great friends with all parties but found it wasn’t a great professional fit.
Why is that? For starters, each partnership started from an existing friendship and the thought of it being cool to launch a business together. Although I experienced success in some of these partnerships, things eventually fizzled out over time.
These moments of sizzle turned into a fizzle, not due to a single reason, but a multitude of things that could have honestly been addressed by me being aware of what a true business partnership entailed.
So to help you avoid some of the things I overlooked while selecting a co-founder, I’ve compiled a list of seven (7) things you should consider before making your decision.
(1) Shared Vision
You and your co-founder must share the same vision for the business. Your vision statement is an aspirational description of what you want to achieve or accomplish in the mid-term or long-term. It is intended to serve as a clear guide for choosing current and future courses of action. If you and your co-founder are not in agreeance with the company’s vision, you’re destined for a tough road ahead.
(2) Shared Values
You and your co-founder must personally share the same values. Of course, you will not have the same values in regard to everything, but the closer you come to this the better. Your values guide your conduct and beliefs; if these do not match, turmoil will inevitably rear its ugly head.
(3) Respectful Communication
You and your co-founder must have common respect for one another. You will not agree with everything. You will have moments of disagreement and heated conversations, but both parties must give respect. You have to be willing to draw a clear line between what is seen as disrespect and not cross it. If not, moments of disrespect can build up inside of you and/or your co-founder and cause friction and animosity that can be detrimental to the health of the business.
(4) Financial Awareness
Obviously, financial management is vital to the success of any endeavor. If you’re over the financial operations of the business, ensure that you make it a point that your partners are knowledgeable of the happenings. If you’re not the most financially sound person and leave that part of the business to others, ensure that you stay current on what’s coming in and out of the accounts. It’s important to keep the business’s financial health a consistent topic of discussion so there are never moments of surprise. (I’ve been there, and it’s not pretty!)
(5) Opinions of Others Matter
Being a subject matter expert or holding a high-ranking title can often result in a boosted sense of confidence. There is nothing wrong with being confident, but ensure that your knowledge and confidence do not provoke the inability to hear & understand the opinion of others. Be open to candid feedback and do not be dismissive of the thoughts of your partners.
(6) Evolution Happens
The people you and your co-founders are at the beginning of the partnership may change over time, which is not bad. Growth brings a change in beliefs, mindsets, and priorities, so do not be surprised by this. As changes occur they should be embraced, and if the changes no longer fit the direction of the partnership and/or company, appropriate decisions can be made for moving forward.
(7) A partnership is like a marriage
You will see your business partners the same, if not more than you will your spouse or significant other. A business partnership is a lot like a marriage, so it’s essential to build a relationship based on trust, communication, and respect, because if not… a split in a business partnership can be just as costly as a divorce.
These are my seven (7) things to consider before choosing a co-founder. The advice given is based on my personal self-reflection, and I hope the insights provided in both parts of this article are of benefit to you as you approach the process of partnering up with others in the business. Best of luck!