Choosing a Business Partner: Questions to Ask Before You Sign

Starting a business with a partner can be exciting. You share the workload, combine your strengths and have someone to face hard days with. But partnerships are also one of the most common sources of business conflict. Disagreements over money, roles, effort or direction can damage both the business and a friendship.

Many of these problems can be prevented by asking hard questions before you sign anything.

Walking together

The prophet Amos asked a simple question: "Can two walk together, except they be agreed?" (Amos 3:3, KJV). In its original context, Amos was speaking about God and Israel. But the principle applies to any close partnership. People traveling together need to agree on where they are going and how they will get there.

That does not mean partners must agree on everything. Healthy partnerships include different perspectives. But on the most important things, such as direction, values and how decisions are made, agreement is essential.

Questions about vision

• What do we each want this business to become in five and ten years?
• How big do we want it to be?
• What does success mean to each of us?
• Is this a lifestyle business, a growth business or something we hope to sell someday?

Different answers here can lead to major conflict later. One partner may want steady, modest income while the other wants rapid growth.

Questions about values

• How will we treat customers, employees and vendors?
• What will we never do, even if it would make money?
• How important is rest, family time and generosity to each of us?
• How does our faith shape how we want to run this business?

If you share faith, talk about how it will practically shape decisions. If you do not, talk honestly about how your values align and where they might differ.

Questions about money

• How much is each of us investing, in money and in time?
• How will ownership be divided, and why?
• How and when will each of us be paid?
• What happens if the business needs more money?
• How comfortable is each of us with debt and risk?
• How do we each handle personal finances?

Money is one of the most sensitive topics in any partnership. Talk about it openly now so it does not become a source of resentment later.

Questions about roles and decisions

• What will each of us be responsible for?
• Who has the final say in which areas?
• Which decisions require both of us to agree?
• How many hours will each of us work?
• What happens if one partner consistently contributes less?

Clear roles prevent confusion and reduce the feeling that one partner is carrying more weight.

Questions about conflict

• How do we each typically handle disagreement?
• What will we do when we cannot agree?
• Would we be willing to involve a mediator or trusted advisor?
• How will we protect our relationship while disagreeing about the business?

Questions about endings

These are uncomfortable, but crucial:

• What happens if one of us wants to leave?
• What if one of us becomes ill, disabled or dies?
• How will a departing partner's share be valued and paid?
• What if we want to sell the business?
• What happens to the business if the partnership ends badly?

Partners who plan for endings are often able to stay together longer, because they are not afraid of being trapped.

Test the partnership first

Before committing fully, consider working together on a small, low-risk project. You will learn a great deal about how each of you handles pressure, deadlines, money and disagreement. That experience can confirm the partnership or reveal problems before they become expensive.

Put it in writing and get professional advice

Once you have talked through these questions, put your agreements in a written partnership or operating agreement. An attorney can help you create a document that reflects your decisions and protects both of you. A CPA can advise on tax and ownership structure.

Bring the decision to prayer as well, and share it with people who know you both. Our posts on praying through a business decision and building a circle of wise counsel can help.

Frequently asked questions

Should I go into business with a close friend?

It can work well, but it requires extra care. Talk through every question here, put agreements in writing and agree on how you will protect the friendship if the business struggles.

Does my business partner need to share my faith?

Many Christians prefer a partner who shares their faith, especially when values strongly shape the business. Whatever you decide, make sure you deeply agree on how the business will be run and what you will never compromise.

What is the most common cause of partnership conflict?

Disagreements about money, unequal effort and different visions for the business are among the most common. Discussing these openly before you start can prevent many problems.