My 20 Questions for Forming a Business Partnership

While being in a business partnership can be highly rewarding, no amount of success can be had unless all parties involved are transparent and on the same page before starting.

I have been co-CEO of BIGGBY COFFEE® with my partner, Bob Fish, for more than twenty years, and he is one of the most important people in my life.

Our relationship has been highly productive, largely because we were very clear about our differentiation of roles going into it. We know exactly who’s going to do what, we execute, we come together on a regular basis and update each other in relation to our responsibilities and then go back to work. No more. No less.

I wanted to dive into something I didn’t spend time on in the book—the 20 most important questions—developed through decades of my own personal experience—for facilitating an open and honest conversation with your business partner(s).

Remember! For the best possible results, discuss these 20 questions before beginning your business endeavor:

1. Would it be ok to bring your spouse in on these questions? Let’s make sure that everyone is on the same page. If they are uncomfortable, then we need to build trust.

 

2. Why are you starting a business? What are your motivations?

 

3. What does your life look like in 1 year, 3 years, 5 years and 10 years?

 

4. How long do you think it’s going to take to reach positive cash flow?

 

5. How much money do you need from the business to sustain you, and for how long?

 

6. What if we run out of money and we can’t take money out—how are you going to float your boat?

 

7. How do you feel about family in the business? Do you have any family members who you are thinking about including in the business?

 

8. How do you feel about borrowing money? Are you willing to put your home up as collateral on a loan? If not, do you have another form of collateral we could use?

 

9. Would you be wiling to fill out and share a personal financial statement so we can have complete understand of each others’ finances? If not, why?

 

10. Let’s talk differentiation of roles. If there are four major categories in the business—finance, operations, sales/marketing and administration—what would you like to fulfill? What are your strengths and weaknesses?

 

11. Have you ever been part of a lawsuit? If so, what was the case? Did you win or lose?

 

12. Have you ever committed a felony? If so, what did you do?

 

13. Let’s talk about work load. It’s important that we’re on the same page—how many hours are you willing to work at the beginning of the business, and then ongoing 2 years, 5 years and 10 years from now?

 

14. Do you want to be the public face of the company? Are you comfortable doing interviews and being on camera?

 

15. What do you see as the major advantages of working together? What do you see as three potential pitfalls? (NOTE: Don’t sidestep this question. Come up with three pitfalls and talk about them)

 

16. What do you think the salaries should be for us managing the business? W-2 income—what we get paid for showing up and working in the business.

 

17. When there is profit over and above those salaries, how will we allocate that profit? How much will we distribute to other members/shareholders and how much will we hold and re-invest in the growth of the business?

 

18. Are you comfortable with a 50/50 partnership? If not, let’s talk about it and why.

 

19. If we need to come up with $100,000 twelve to eighteen months into the business, how are we going to get it?

 

20. Are you willing to put your own money into the business without any ability to get it out for 3-5 years, knowing that if you walk about you would lose your investment?

 

By using these questions as guidelines to learn as much as possible about your business partner(s) and their business sense, you will feel more confident and prepared to embark on your journey through entrepreneurship.

It’s important to note that, once your business partnership is underway, leave each other alone outside of your regular update meetings. Don’t meddle in each others’ business. Bob and I have done this for more than two decades, and it has worked out really, really well.

That’s my take on business partnerships. I hope you find it useful.

Boom baby.

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For more advice and anecdotes on how to start and run a successful business, order my book, Grind: A No-Bullshit Approach to Take Your Business from Concept to Cash Flow.