Questions to Ask a Potential Business Partner
For people deciding whether to go into business together, before any paperwork is drafted. These questions cover money in, money out, who decides what, and the exits, which are the four things partnerships usually fail over.
The questions
Open any question for the note
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.
How many hours a week will you actually give this, and what else are you committed to?
Why ask it
Ask for a number and then ask what it displaces, because unnamed commitments are what turn into missed weeks. Mismatched effort with matched ownership is the most common source of quiet resentment in a young partnership.
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 much money are you putting in, and where is it coming from?
Why ask it
Savings, a home equity loan, a family member, or a credit card each carry a different pressure. Money borrowed from a relative brings a third opinion into the business whether or not anyone acknowledges it.
What does your own financial situation need from this business, and by when?
Why ask it
A partner who can go eighteen months without income and one who needs to draw a salary in month three are running different companies. This is uncomfortable to ask and much more uncomfortable to discover in the first cash crunch.
What do we each get paid, and at what point do we start taking money out?
Why ask it
Settle salary or draws separately from ownership, because conflating them makes every raise a fight about equity. Write down the trigger for distributions, such as a cash reserve threshold, rather than deciding it in a good month.
How do we split ownership, and what is the reasoning behind that number?
Why ask it
You are testing whether the split has a rationale beyond fairness as a feeling: cash contributed, time, existing customers, the idea. An even split chosen to avoid an awkward conversation is a decision to have that conversation later under worse conditions.
Does anyone's stake vest over time, and what happens if one of us leaves in year one?
Why ask it
Without vesting, a partner who walks away after four months keeps their share of everything you build for the next decade. Raising it early is easier than raising it after someone has already lost interest.
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.
Name three decisions you want the final say on.
Why ask it
Far more revealing than asking about decision-making style, because it forces a concrete claim: pricing, hiring, product, spending above a limit. Overlapping claims are exactly the collisions your written agreement needs to resolve.
What do we do the first time we deadlock?
Why ask it
Two equal partners with no tiebreaker can freeze a company indefinitely. Workable answers name a mechanism in advance: a neutral third director, a mediator, or a rule that the partner responsible for that area decides.
Have you been in business with someone before, and how did that end?
Why ask it
Listen to how they describe the other person. A story in which the former partner was entirely at fault, with no decision of their own examined, is a preview of how your ending will be told.
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.
Is there anything in your history I would rather hear from you than find out later: debts, judgments, a non-compete, a prior partnership dispute?
Why ask it
A non-compete or an unresolved judgment can prevent the business from operating or from opening a bank account. Asking plainly gives them the chance to disclose, and a disclosure that arrives from a bank or a lawyer instead is usually fatal to the partnership.
What would you do if you thought I was not carrying my share, and how do you want me to raise it if I think the same?
Why ask it
The answer tells you whether they raise problems or accumulate them. Agreeing on a channel now, a standing weekly conversation or a named number of hours, gives the complaint somewhere to go besides a blow-up.
What would make you want out?
Why ask it
Everyone has a limit: a bad year, a health problem, a better offer, a child. Naming it removes the pretense of permanence and lets you write the exit terms while you still like each other.
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.
What happens if one of us dies, divorces, or cannot work for six months?
Why ask it
Absent an agreement, a partner's stake can pass to a spouse or an estate that has no interest in running the company. This is also the conversation where key-person insurance and disability coverage stop sounding paranoid.
What have we not talked about that we should?
Why ask it
Ask it last and wait through the silence. The thing that surfaces here, a side project, a visa timeline, a family obligation, a health issue, is usually the item that would have arrived as a surprise in month eight.
Testing the partnership before you form one
Practical guidance for the conversation itself
Before the paperwork
Do a small paid project together first
Take one client, one product run, or one event as a joint venture with a fixed end. You will learn how they handle a deadline, a complaint, and splitting a small amount of money, which is the same behavior scaled down.
Write the roles down before the equity
Put on one page who owns which functions, who signs what, and what each of you commits in hours and money. Partners who cannot agree on that page will not be rescued by an operating agreement drafted around it.
Look at each other's numbers
Credit, existing debt, tax filings, and any prior business obligations become shared problems the moment you sign a lease or a loan. Exchanging this information is normal in a partnership and refusal to do so is information of its own.
Use separate lawyers for the agreement
One lawyer cannot represent both partners' interests in a document about what happens when you disagree. Splitting the cost of two reviews is trivial against the cost of an ambiguous buy-sell clause.
What the written agreement has to settle
- Ownership percentages, what each partner contributed for them, and whether any of it vests over time
- Roles and authority: who decides what alone, and what spending or hiring requires both signatures
- Compensation: salaries or draws, how they change, and the trigger for distributing profit
- Capital calls: what happens when the business needs more money and one partner cannot or will not contribute
- Deadlock procedure, with a named mechanism rather than a promise to talk it through
- Buy-sell terms: valuation method, payment period, and rights of first refusal on a sale to an outsider
- Departure, death, disability, and divorce, including whether a spouse or estate can hold or vote the stake
- Non-compete and confidentiality obligations after a partner leaves, to the extent enforceable where you operate
- Books and access: who keeps them, which system, and each partner's unconditional right to see everything
Signals worth slowing down for
Reluctance to put agreed terms in writing
A partner who says paperwork means you do not trust each other is asking you to rely on memory in a future argument. Willingness to sign what you already agreed verbally costs nothing if the agreement was real.
Urgency about signing
A deadline that requires a decision this week, before financial disclosure or a lawyer's review, usually serves one side. Legitimate opportunities survive two weeks of diligence.
Money that is not where they said it is
A promised contribution that keeps moving, arrives late, or turns out to be a loan from someone unnamed changes the whole structure. Confirm funds are available before you commit to a lease or a hire.
A pattern of blaming previous partners
Listen across the whole conversation, not one story. Someone whose past collaborators were all difficult is describing a constant, and you would be the next one.
Habits that keep a partnership working
- A short standing meeting on the same day each week, with money and problems as the first two items
- Both partners with independent access to the bank account, the books, and the tax filings
- A written record of decisions, even a shared document with dates, so disagreements start from what was decided
- An annual review of the agreement itself, since roles and contributions drift within the first two years
- Separate personal and business finances from day one, including cards, accounts, and any loan paperwork
- One outside adviser you both trust, an accountant or a mentor, who can be asked before a disagreement hardens