Even the most ambitious business owner needs a helping hand. Having the right business partner by your side can mean the difference between success and failure. No matter who you choose as a partner, communication is key to a productive relationship. And when you’re in business together, there’s no sidestepping the subject of finances. Here are a few topics to touch on with your business partner.
Talk About Personal Finances
Although you generally want to draw a line between personal issues and business concerns, talking about personal finances can give you a better sense of how your partner views and manages money. For example, you might discover that they have a habit of indulging in unnecessary spending from time to time. On the other hand, you might find that they’re thrifty and willing to do comparison shopping when you’re working with a tight budget.
Talk About Their Plan B
No matter how confident you’re feeling in your goods or services, running a business comes with a certain degree of risk. Discuss your individual back-up plans in case things go south. Do you both have emergency sources of income? Perhaps your partner already has some money tucked away in the event of an emergency.
Talk About Metrics of Success
Not everyone measures success in the same way. Do you want the business to grow to a specific size? Are there financial milestones either of you want to hit for each quarter? Get on the same page when it comes to which metrics to use. Otherwise, you might end up in a situation in which one of you is satisfied by the business’ performance while the other is frustrated.
Talk About Splitting the Profits
This is one of the most important (and unavoidable) subjects you and your business partner will need to talk about. How will you divide the business profits? Ensure the division is fair and based on your individual contributions. The more business partners you have, the more extensive this conversation will need to be. Get this information in writing to prevent disputes in the future.
Talk About the Possibility of Hiring an Outside Advisor
Unless one of you has the time, knowledge, and energy to dedicate to the task, you’ll need to decide on who will fill the role of a financial advisor. A professional financial advisor in Denver can handle everything from risk assessment and portfolio management to goal setting and employee benefit support. Before you decide on a financial advisor schedule an in-person meeting, so both you and your partner can come to a consensus on a suitable, trustworthy advisor.
These are just a few of the many conversations you’ll need to dive into with your business partner. The dialogue between you should be ongoing, as business environments can be dynamic, and sometimes even a little chaotic. As your needs and work capacities change, remember to keep each other in the loop through open and candid conversation.