5 Questions You Must Ask Before Getting Into Bed With a Business Partner
Before hopping into the proverbial sack with a new business partner, you need to ask these questions:
- What’s our exit strategy?
- How will we handle/moderate conflict?
- How much equity will we each own?
- What are the roles each of us will play?
- What are each other’s expectations for ourselves and for one another?
If you don’t ask these questions and discuss them thoroughly and honestly, you’re going to be surprised at some point in the future (and not in a good way.)
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Nevertheless, great food for thought. Thanks for the post.
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Core values are definitely key, but the question of what does success look like can be quite vague. Lots of people might say, "make a lot of money," for example (although that's not the only definition of success.)
The question of an exit strategy really forces a very specific look at what needs to be done to succeed, since in this exiting is a real/tangible measurement of success.
So asking, "What is the exit strategy?" is like the point of the triangle to success. (or something like that!)
I hope we can continue to discuss this and further related issues! Thanks!
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Also, it's important to watch for the potential partner's reaction to the questions. Are they welcomed as part of the process or are they trivialized?
Carolyn
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Having said that your exit strategy might be, "to earn a comfortable living and run a business till you retire." In effect your exit strategy is to grow to a certain size and keep it going...not really an exit strategy per se (in the traditional sense of being bought out, acquired, IPO, etc.) but asking the question with the focus on "exit strategy" really helps focus the purpose/drive of the company.
Carolyn - you're definitely right about watching a potential partner's reaction. After all the questions are there to create dialogue, not be an interrogation. That dialogue hopefully lets you learn something more about the potential partner.
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But a real exit strategy is a success story not a bailing out story...
Thanks for stopping by!
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