Help! My business partner is from another planet

Help! My business partner is from another planet

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As a business grows, pressure can bring personal differences to the surface you didn’t know existed.

My experience has put me in touch with many start-ups in various capacities in strategy, operations, product, marketing and business development, to name only a few. I have worked with several stages of product development – from the birth of an idea to its commercial viability testing to finding growth capital to bring an idea to market on a large scale.

You’re exposed to the rollercoaster of emotions that happens when a business grows. However, the enthusiasm of a start-up or a new product can get out of hand. It is crucial not to neglect the personal and emotional side of your business. Targeted campaigns, spreadsheets and regular business questions are essential. However, these activities can mask significant differences.

It is essential to be on the same page from day one. What do the founders want to do in 5, 10 or 25 years? Is their vision to change the world, acquire a big player, and exit with a lot of money, or are they founding a lifestyle business?

This lack of clarity can lead to conflicts that can seriously affect the company’s direction, for example, when deciding on future financing rounds. As friends, it’s great to go into business together. But it might be challenging to enjoy the same strength of relationship on a professional level.

On top of that, you need deep respect for each other, enormous patience, and recognising that each person’s abilities, roles, and experiences are different and weighty. Increased stress, workload and lack of sleep also determine the level of resilience that every person has.

An external expert can listen and work from the start to create a common goal that conveys a strong sense of direction and purpose.
The formulation of a shareholder agreement at the outset is essential. It is vital to have a structure that defines who takes decisions and what to do if there are disagreements. When things get complicated, it becomes critical. Think about what could go wrong, add it to the agreement.

I know co-founders who have reached parity agreements. They were unable to decide whether to take their start-up to the next level, which created a problematic situation along the way. Disagreements can put a strain on people’s lives, and your early enthusiasm for business may wane. The company may come to a standstill.

I know that it is the last thing on people’s minds, but no one likes to think of the worst-case scenario when they get enthusiastic in the first few days of a new venture. I would urge anyone to establish a whole range of ground rules, objectives and communication, as it could determine a company’s fate.

It is an excellent way to work out important details before politics and other problems raise their ugly heads. It is a give and take exercise that brings you into balance. Over time, these rules serve as a grounded, reasonable voice. They will also provide extra confidence as you move forward.

This topic was included in articles published on SME Insider, the Federation of Small Businesses website, and the LBS Start Hub.

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