In Part 1 series of this blog I spoke about my experience as a co-founder and offered tips on documenting a co-founder prenuptial agreement. Setting clear roles, responsibilities, expectations and the exit agreement together with your co-founder is essential from day one. Below are a few more tips for ensuring a successful co-founder relationship.
3. Keep talking
When you’re starting a business, it’s the wrong time to channel your inner Grizzly Adams and head to the mountains for a year of solitude (unless you’re opening up a mountaineering store).
Starting a business is really a discovery process. Questions lead to more questions. You have to keep asking them. And as you get the answers, you may find who you need to partner with.
The best business people know they don’t know everything. You have to keep seeking data and surround yourself with people who either have the answers to your questions or are equipped to go find the answers.
Communication is also key once you’re in business together.
“Fire drills happen when people fail to sit down and talk for 15 minutes,” says attorney Barry Shreiar.
You need to hash out operating details. For example, do all partners need to agree to borrow money before doing so? Is there a certain dollar amount that needs to be approved by the partners before it can be spent? Will the holiday party be in Cancun or Costa Rica? These are just few of the many important questions you will need to answer.
You also need to continually take stock of where you’re at and where you want to go. Shreiar recommends meeting at least once a year to discuss what changes you might want to make for the coming year. “Plan and constantly review your plan,” he says. “It will save you time, money and effort.”
Contracts can be added to and changed. They can grow and evolve with your business and your life.
4. Get professional help
You might think we mean that anyone who would start a business needs professional psychological help.
But that’s not what I am referring to.
When you’re getting up and running – and even afterwards – lawyers and accountants are your friends. Engage them early in the process. As much as new entrepreneurs want to do everything themselves, it’s worth it to get the expert advice you need. You can’t be a pro at everything. If you were, you probably wouldn’t need a partner to begin with.
Lawyers and accountants may be lesser partners in your business – ones you pay to get certain tasks done – but find good ones. They can be invaluable in helping you set up your business the best way for you and your partners. And they can help you avoid making mistakes that will cost time, money, and headaches later.
5. Consult with your extended board of directors
Businesses aren’t run in a vacuum. You have your own life to live outside of the business – you should anyway. There are people in your life who may benefit from the business. But they probably endure the negative parts too – missing the kids’ soccer games, not helping with homework, being late for dinner for the umpteenth time.
Check in with your family and loved ones regularly. They’re partners with you in any business endeavor, too. Share your goals with them. Set expectations with them. Help them see your vision so they know what you’re trying to achieve and why it’s all worth it.
Are you expanding? How much will that take out of you? Are you working 70-hour weeks for the next year because then you’re going to sell your share of the business and move to Easy Street?
Do you have an exit plan written down so your co-founder can continue the business without you? No? Then go back to step one and create it!
About the author:
Kim Folsom, Founder of LIFT Development Enterprises, is a not-for-profit, community development organization with a mission to help underserved, underrepresented small-business owners – and Co-Founder and CEO of Founders First Capital Partners, LLC, a small business growth accelerator and revenue based venture fund. Learn more about Kim and her company’s mission to help grow and fund underserved and underrepresented 1000 small businesses by 2026 via their Founders Business Growth Bootcamp program, visit www.foundersfirstcapitalpartners.com