Only Fools Rush Into Business Partnerships

Jeff Cornwall, who directs the Center for Entrepreneurship at Belmont University in Nashville, published a column yesterday on how entrepreneurs should go about picking a business partner. That's a subject I've written about here, and also I recently talked with Nigel Nicholson on the issue of family business partnerships and how they can break down if families aren't careful. Cornwall adds some insight into this matter, especially on questions that potential business partners should ask each other:

• Do you share the same vision for the business? Do you share the same aspirations for the business in terms of its size?

• Are you all going to make the same level of commitment of time to the business? What are your work habits and work ethic? How much time off do you plan to take each day, each week, each year?

• How much money will you put into the business? And how much do you expect to get out of it?

• Who will be the president of the company? What roles will the other partners play?

• How strong is everyone's credit rating? Can all partners help to guarantee a loan, if necessary?

• What if one of you gets married and the new spouse gets a job offer in another city? Would you move away? How will employees, customers, suppliers, etc., all be treated?

Cornwall also notes that asking these questions becomes especially important if you are entering into a limited liability company or S corporation with your partner. More on that here.