How to Have a Successful Co-Founder Relationship

Choosing who your business partner will be is the single most important decision you will make in your business -- and potentially in your life.

learn more about Jeff Golfman

By Jeff Golfman

Opinions expressed by Entrepreneur contributors are their own.

Choosing who your business partner(s) will be is the single most important decision you will make in your business -- and potentially in your life. It is arguably more important than who you will marry, as you will likely spend more hours with your business partner and their actions have a massive impact on your work-life balance, work schedule, personal life, income, stress levels, happiness and your overall daily life.

With that said, here is my advice and tips on choosing a business partner.

Related: Before You Bring a Co-Founder on Board, Ask These 5 Questions

Be picky.

Choose your business partner(s) carefully and wisely and never from a place of desperation. There are hundreds of potential partners and investors out there for you (assuming you have a good business idea and that you personally have value and skills to offer) so don't get "married" to the first person you meet. Too many entrepreneurs jump at the first opportunity, because they do not see the other options in front of them.

Do research.

Take your time before agreeing to partner with anyone. Do your due diligence. Speak with several of the people who they have worked with in the past and in the case of an investor partner, talk with several of the founders that they have invested in before. Find out the good, the bad and the ugly in order to make an informed decision.

Determine your needs.

Your business partners should compliment your own skill sets. They should be people who bring different other areas of expertise, interests and experiences than you in the areas of: marketing, sales, operations, finance, human resources, technology, operations and fulfilment, to name a few.

Related: 7 Qualities Every Entrepreneur Should Look for in a Co-Founder

Do not team up with people who have the same skills set as you or people who will be your submissive "yes" person. You need leader partners who will hold you to a higher standard and challenge you. Once you team up, you collectively raise the overall quality of the business, together you are a better team and the business is further ahead by the union.

Test it out.

In the case of a day-to-day working partner, before agreeing to being legally bound to each other do a short three to four week test project together. For example, if your new partner will become the CFO of your company, hire them to do a financial project first or in the case of a CTO, give them a back or front end development project to do so that you can see how you interact together and how you get along. You will experience their work ethic, your rapport with each other and the quality of their work before you agree to being business partners and getting legally intertwined.

Be specific.

In writing, outline very clear job descriptions, titles and areas of responsibility with your partners and agree to how many hours everyone will work in the business each week. Have the equity ownership percentage, votes and board seats contingent on the new partners ACTUALLY doing what they have agreed to do. By creating an Earn-In structure you will avoid many problems down the road when your "all-star" partner turns out to be a major dud or is MIA.

Have an exit plan.

Make sure that you build an exit strategy mechanism into your agreements that allow you to end the partnership smoothly without damaging the business or causing stress and drama. Most partnerships do not work out, so be prepared for the day when one of the partners wants to leave the business, or you want them to leave as soon as possible. The agreements between you should provide opportunities to buy and sell shares and not tether you both to each other for the entire life of the business.

Related: 10 Steps to Finding the Right Co-Founder

Jeff Golfman

Founder and president of The RAW Office

Jeff Golfman is the founder of The Raw Office, an ecommerce reseller with over 5,000 eco-forward office supplies for home offices, small businesses and large enterprises.

Related Topics

Editor's Pick

This 61-Year-Old Grandma Who Made $35,000 in the Medical Field Now Earns 7 Figures in Retirement
A 'Quiet Promotion' Will Cost You a Lot — Use This Expert's 4-Step Strategy to Avoid It
3 Red Flags on Your LinkedIn Profile That Scare Clients Away
'Everyone Is Freaking Out.' What's Going On With Silicon Valley Bank? Federal Government Takes Control.

How to Detect a Liar in Seconds Using Nonverbal Communication

There are many ways to understand if someone is not honest with you. The following signs do not even require words and are all nonverbal queues.

Business News

A Retired Teacher and Her Daughter Were Scammed Out of $200,000 Over Email: 'I'm 69 Years Old and Now I'm Broke and Homeless'

The mother-daughter duo was in the process of buying a townhouse when their email chain with the title company was hacked.

Starting a Business

This Seasoned Exec's High-Tech Farming Company Has Upended the Status Quo. Here Are His Top 3 Success Tips.

This founder is on a mission to revolutionize the fresh food supply chain to embrace greater simplicity, safety and sustainability.

Business News

How to Give Feedback Without Hurting Anyone's Feelings

Constructive feedback can be an excellent way to boost morale, productivity and results.

Business News

New Starbucks CEO Steps in Early Amid Union Turmoil — Will He Accept an 'Olive Branch'?

The 55-year-old former CEO at Reckitt Benckiser Group PLC was expected to assume the role on April 1.

Business News

Carnival Cruise Wants Passengers to Have Fun in the Sun — But Do This, and You'll Get Burned With a New $500 Fee

The cruise line's updated contract follows a spate of unruly guest behavior across the tourism industry.