Questions to Ask a Business Partner
Questions to ask a prospective partner or co-founder when starting a business partnership, while it is still easy to walk away: what each of you will actually do, the money and obligations you each bring, how decisions get made and deadlocks broken, and what happens when one of you wants out. The list closes with a few for two people already in a partnership, to put to each other once a year.
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The questions
Each question, and why to ask it
How did you come to want a partner for this, rather than doing it alone or hiring someone?
Why ask it
Some people want a partner for the work, some for the money, and some to avoid carrying the risk alone. The third reason produces the most resentment once the workload turns out to be uneven.
What do you picture each of us actually doing day to day a year from now?
Why ask it
If the answer is that you will both do everything, in practice you will both chase sales and neither of you will do the bookkeeping. Push until you have two job descriptions you could hand to a stranger.
How many hours a week do you expect to give this, and what else has a claim on your time?
Why ask it
Watch for someone keeping a full-time job with no date for leaving it. Equal equity for half the hours is one of the most common ways partnerships sour in year two.
What are you bad at that I will end up covering?
Why ask it
A candid list tells you what you are signing up to absorb. Someone who cannot name anything is telling you they will not accept correction later either.
What went wrong in a previous partnership or close working relationship of yours?
Why ask it
Everyone has a version of this story where they were the reasonable one. Listen for whether they can name one thing they themselves handled badly.
What does this business need to earn, and by when, for you to call it a success?
Why ask it
Figures and dates separate a steady income business from a growth bet. Two partners with different answers here will argue about every decision to reinvest rather than pay themselves.
How much money can you put in, and where is it coming from?
Why ask it
You want a number, not a feeling. Money from a relative or from a deal that is about to close is not money in the account, and a partner who falls short of their contribution will want extra equity to make up for it.
What does your own financial position look like if this pays you nothing for eighteen months?
Why ask it
Runway is personal before it is corporate. A partner with a mortgage and no savings will push for whatever revenue pays them soonest, even when patience would serve the business better.
Are you bringing anything in that you already own: clients, code, a brand name, a supplier relationship?
Why ask it
Whatever they bring needs assigning to the company in writing. If a key client relationship or codebase stays personally theirs, they keep a lever over you indefinitely.
Do you have debts, lawsuits, non-competes or other commitments I should know about?
Why ask it
A non-compete from a former employer can wipe out your first year of work. Ask plainly, then ask for it in writing, since silence here is more often embarrassment than deceit.
How do you think ownership should be split, and should any of it vest over time?
Why ask it
An even split feels fair on day one and deadlocks the company later. Vesting is what protects whoever stays if the other person loses interest in month five.
How should we handle salaries, draws and reinvesting profit in the first two years?
Why ask it
This is where sacrifice gets counted. If one of you plans to take a wage while the other lives off savings, decide now whether that difference buys anything.
Which decisions do you want to make on your own, and which ones need both of us?
Why ask it
You want a spending threshold and a hiring threshold expressed in actual numbers. Agreeing to discuss everything works until one of you is on a plane and a supplier needs an answer.
If we are co-founders, which of us is chief executive, and what does that title decide?
Why ask it
Two co-founders with an equal say and no named lead can stall on the calls that will not wait. Settle whether the title carries a casting vote on anything, or only the job of speaking for the company to investors and staff.
When we disagree and neither of us will move, how should we settle it?
Why ask it
The workable options are few: a tie-break vote held by one person on defined topics, a named neutral third party, or a mediation clause. Anyone who says serious disagreement will not happen has not run a business with another adult.
How often do you want to go through the books together, and who keeps them?
Why ask it
A monthly review with a named bookkeeper is a healthy answer. Reluctance to open the numbers this early is the clearest early warning you will get.
How do you want us to handle hiring, and firing?
Why ask it
Firing is the harder half, and a partner who cannot do it will quietly leave the job to you. Get their view now, before there is a specific person's name attached.
What would you want to happen if one of us stopped pulling their weight?
Why ask it
You are asking for a mechanism, not a reassurance. Without an agreed way to reduce someone's role or unvested stake, the only remaining remedy is a lawsuit.
What should happen if one of us wants out in year three?
Why ask it
Ask about price, notice period, and whether the person leaving may compete or take clients. Someone who has never considered this has probably never watched a partnership end.
What happens to the business if one of us dies, divorces or becomes seriously ill?
Why ask it
These are the events that put a partner's spouse, heirs or creditors into your company. Buy-sell terms and insurance exist for exactly this, and they have to be arranged while both of you are well.
What could I do that would make you want to end this partnership?
Why ask it
Their answer maps their limits: hidden numbers, going around them to staff, promises made without asking. It also shows you what they would rather not raise with you directly until it is too late.
What do you want this business to be in five years, and what would count as a good outcome for you personally?
Why ask it
One partner picturing a sale and the other picturing a steady business they run until retirement will fight over every reinvestment decision. The personal half matters too: a partner who needs an exit to fund something else is on a clock you should know about.
What is the smallest outcome you would still be happy with?
Why ask it
One partner wanting a solid business paying two salaries and the other wanting a company that either becomes large or dies is a genuine incompatibility, and it does not show up until the first offer or the first plateau. Ask early and believe the answer.
What are you good at that I am not, and what will we have to hire for in the first year?
Why ask it
Two people with the same strengths are a hobby, not a company. A partner who can name the gap, sales or bookkeeping or delivery, has thought about the business rather than the idea.
Who is going to do the work neither of us wants to do?
Why ask it
Someone has to chase invoices, file taxes, answer complaints, and clean up. If both of you assume it lands with the other, it will land with whoever cares more, and that person will keep score.
How do you behave when something has gone badly wrong and it is somebody's fault?
Why ask it
Ask for an actual instance rather than a description of their style. Whether they go quiet, get loud, or start assigning blame is the thing you will be living with during the worst week of the business.
Has a business of yours failed, and what happened to the money and the people?
Why ask it
Failure is common and not disqualifying; the handling of it is the signal. Listen for whether staff were paid, whether suppliers were left short, and whether they can explain what they got wrong without the explanation being entirely about someone else.
What would you do if we ran out of money in month eight?
Why ask it
The answers separate people quickly: borrow personally, raise outside money, cut to the bone, get a job and continue at nights, close it. You are checking that their instinct is one you could live with, because that decision arrives in a hurry.
Would you take outside investment, and how much of the company would you give up to get it?
Why ask it
A co-founder who wants to raise money and one who wants to grow on revenue are building two different companies. Talk about dilution in percentages now, because a funding round shrinks both of your stakes and can bring a third voice into every decision.
Whose name goes on the lease, the loan, and any personal guarantee?
Why ask it
Personal guarantees survive the partnership and the business, and lenders pursue whoever signed regardless of the ownership split. If only one of you is signing, decide now what the other gives up in exchange for carrying that risk.
How do the people you live with feel about this, and what are they risking?
Why ask it
An unconvinced spouse becomes a silent partner who lobbies against every late night and every reinvestment. If a home or joint savings is on the line, their view is a business fact, not a private matter.
What would count as serious enough that one of us should have to leave?
Why ask it
Agree the short list in advance: dishonesty about money, competing on the side, disappearing for a month. Written into an agreement, it becomes a process; left unwritten, it becomes a fight.
If one of us wants to sell and the other does not, what happens?
Why ask it
This is what a buy-sell agreement exists for, and the answer needs a valuation method and a payment period, not a promise to be reasonable. Without one, the partner who wants out can force a sale of the whole business.
When would you want to sell, and is there anyone you would not sell to?
Why ask it
Exit expectations differ by years, not months. Also worth knowing whether they would refuse a competitor, an overseas buyer, or private equity on principle, since that constraint eventually belongs to both of you.
If we split up, how do we value the business, and who keeps the name and the customers?
Why ask it
Agree the valuation method and payment terms while nobody has an interest in the outcome. Also settle the awkward specifics: the brand, the client list, the domain, and whether either of you can start something similar.
Who is our lawyer and our accountant, and are we each getting independent advice?
Why ask it
One lawyer cannot properly represent both of you on the founding documents. Paying for separate advice on the partnership or shareholders agreement is a small cost, and a partner who resists it is telling you something about how future disagreements will go.
Once we are in partnership, how often will we sit down to review the partnership itself, apart from the business?
Why ask it
A fixed date, quarterly or yearly, lets a complaint wait for the meeting instead of coming out in front of staff. Partners who only discuss the partnership when something is wrong learn to dread the conversation.
Is the split of work still the one we agreed on, and if it has drifted, should the money move with it?
Why ask it
Roles shift in the first year without anyone deciding that they should. Raised on a calendar date this is routine; raised for the first time in the middle of an argument, it sounds like an accusation.
Is there anything in our partnership agreement that no longer fits the business we actually have?
Why ask it
An agreement drafted for two people and no staff rarely suits a business with ten employees and a loan. Take any change to your own advisers and ask how an amendment has to be made where you are, since that depends on the country and on how the business is set up.
Do you still want the same thing from this business that you wanted when we started?
Why ask it
Lives change faster than agreements do: a child, an illness, a job offer, plain tiredness. Heard at a yearly review, a change of heart leaves time to plan a smaller role or an orderly exit; heard late, it leaves only the exit.
Before you sign anything
Practical guidance for the conversation itself
How to sequence these conversations
- 1Have the first conversation with no documents on the table. You are listening for how they talk about money and past fallings-out, not negotiating terms yet.
- 2Write down what you each said you would do. Send it to them in an email and see whether their version matches yours.
- 3Do the paperwork checks before the emotional commitment gets any deeper: company filings, any court records, references from two people who worked with them.
- 4Only then talk splits, vesting and exit terms. Doing it in this order means neither of you is bargaining while also trying to persuade the other to say yes.
What has to be in writing
- Ownership percentages and whether they vest, with dates.
- Who decides what, with a spending figure above which both signatures are needed.
- Salaries or draws, and how profit is split once there is any.
- Assignment of anything either of you brings in: client lists, code, trade marks, domain names.
- A deadlock clause naming a real mechanism, not just a promise to negotiate in good faith.
- Buy-sell terms covering death, illness, divorce and a voluntary exit, with a valuation method.
- What happens to the customers and the brand if the partnership dissolves.
Answers worth slowing down for
Money that is not there yet
A promised investment that depends on a house sale, a bonus or a relative changes the whole balance if it never arrives. Agree in advance what happens to the split if the contribution is late or short.
No account of any past conflict
A partner whose previous fallings-out were always entirely the other person's fault will describe you the same way to someone else in three years.
Reluctance to put it in writing
Phrases like we do not need lawyers between friends, or we will sort the paperwork once we are earning, mean the hard terms get decided during the first crisis instead.
Very different definitions of enough
One partner wanting a stable income and the other wanting to sell within five years is not a difference you can split. It shapes hiring, pricing and every reinvestment call.
Getting outside help
Each of you should have the partnership agreement read by your own lawyer rather than sharing one. An accountant can tell you whether the profit split you have sketched actually works after tax in your jurisdiction. Both conversations are cheaper than an exit dispute, and the way a prospective partner reacts to being asked to do this is itself an answer.
Once you are in the partnership
The closing questions on the list are for partners already in business together. Put a review in the calendar, away from the premises, and take them in order: how often you will meet like this, whether work and money still match, whether the agreement still fits, and whether you both still want what you set out to get. Write down what changed, and where it touches ownership or pay, have the agreement amended instead of relying on the conversation.