Having conversations about money can be tough — especially with a potential business partner you don’t know well.
Starting a business alone can be done, but having a partner who compliments your strengths and weaknesses can make the journey even more rewarding. Finding the right fit comes down to a variety of factors from personalities to location. Inevitably finances and how much capital they bring, will also play into the equation.
Seek out someone who compliments not only your personality, but your financial approach. If you’re a risk-taker, you may want to find someone who is more financially conservative to help create balance. Having too much of either won’t serve the business as well. In order to determine this, you’ll have to ask some questions about your potential business partner’s finances.
Here are some things you should be prepared to ask about:
- Personal finances
- Credit history
- Risk assessment
- Their definition of success
- How much they can contribute
- Dividing profits
Most importantly, put it all in writing! It’s the best way to ensure that there’s a record of what you agreed on before the profits start rolling in.
Understanding their approach to personal finance will help you get a sense for how they might handle business finances. Although debt may be a reflection of poor money management, not all debt is inherently bad, like student loans. Consider this when formulating your questions.
If you’re unsure where to start or need some example questions, this infographic outlines what you should ask and how to ask it.