A conversation-by-conversation guide to finding out — before you sign anything — whether you actually need a partner.
I’ve worked with thousands of businesses over the years.
I’ve seen businesses survive recessions, bad marketing, cash flow problems, and tough competition.
One of the biggest things I’ve watched destroy otherwise great businesses isn’t any of those things.
It’s partnerships.
Now don’t get me wrong. Some of the greatest companies ever built started because two people came together.
Walt Disney and Roy Disney.
Walt was the dreamer. Roy was the financial mind who made those dreams possible. Walt pushed the limits. Roy protected the company from collapsing under those ambitions. Together they built one of the most recognizable brands in history.
Steve Jobs and Steve Wozniak.
Jobs wasn’t the engineer. Wozniak wasn’t the salesman. Jobs saw the future and convinced the world to believe in it. Wozniak built the technology that made it real. Their personalities were completely different, and that’s exactly why the partnership worked.
Bill Hewlett and Dave Packard.
Two engineers, same skill set on paper — but Hewlett was the technical visionary chasing new ideas, and Packard was the disciplined operator who turned those ideas into a company that could actually ship product. HP survived nearly 70 years because they divided the work instead of duplicating it.
Great partnerships aren’t about finding someone just like you.
They’re about finding someone who makes you better.
Unfortunately, for every Disney or HP, there are thousands of partnerships that quietly fail.
Most don’t fail because someone is dishonest.
Most don’t fail because someone is lazy.
They fail because two people never had the conversations they should have had before they started.
Before You Get a Business Partner…
Ask yourself one question.
Do I actually need a business partner?
I completely understand why new entrepreneurs want one.
Starting a business is scary. There’s uncertainty. There’s financial risk. Having another person beside you makes it feel safer.
But ask yourself honestly…
Are you solving a business problem, or are you solving a fear problem?
Those are two very different things.
A business partner should multiply the value of the company. They shouldn’t simply make you feel more comfortable taking the leap.
Exercise #1: The Billion Dollar Test
Close your eyes for a minute.
Imagine your business becomes wildly successful.
Not moderately successful.
Wildly successful.
Someone offers to buy your company for $1 billion.
If you’re 50/50 partners…
Your partner is about to receive $500 million.
Before you hand them that check, ask yourself:
Did this person create $500 million worth of value?
If the answer isn’t an immediate yes…
Slow down.
When your business is worth nothing, ownership percentages feel meaningless. When your business is worth millions, every percentage point matters.
The Bare Minimum Every Partnership Should Do
If you’re going to have a business partner, here’s the bare minimum I think every partnership should do.
Sit down together. Turn on your phone’s voice recorder. Then answer the following 100 questions honestly.
Not ten. Not twenty. One hundred.
Some of these will seem easy. Some will seem unnecessary. Some will make you laugh. Some may start an argument.
Good.
I’d much rather watch two people argue over a hypothetical situation before they become partners than watch them spend years fighting over the exact same issue after the business is successful.
The goal isn’t to avoid disagreements. The goal is to discover them early.
Exercise #2: Record the Conversation
Don’t simply answer these questions. Record yourselves discussing them.
After you’re finished, ask yourselves:
- Which conversations became emotional?
- Where did we disagree?
- Were we surprised by each other’s answers?
- Did we assume different things?
- Are we actually aligned?
Those disagreements are gifts. They’re showing you tomorrow’s problems while they’re still easy to fix.
What Is an Operating Agreement?
People often think an operating agreement is just another legal document.
I think of it differently.
It’s simply Operating in Agreement.
It’s the rulebook your business follows when life inevitably happens.
When someone wants a vacation. When one partner wants to reinvest profits. When another wants distributions. When someone gets divorced. When someone wants out. When someone stops pulling their weight.
The conversations you’re about to have should become the foundation of that agreement.
The 100 Conversations Every Business Partnership Should Have
Vision & Purpose
- Why are we starting this business?
- What problem are we solving?
- What does success look like in one year? In five?
- Are we building a lifestyle business or planning to sell someday?
- Are we driven primarily by profit, purpose, or both?
- What values will never be compromised?
- What customers or industries will we refuse to work with?
- What risks are we willing to take?
- What happens if one partner’s vision changes?
- If we disagreed on all of the above, would we still start this business?
Ownership & Equity
- Why are we splitting ownership this way?
- Should ownership vest over time?
- What happens if someone leaves during the first year?
- Can ownership percentages ever change, and who approves it?
- How do we value sweat equity versus cash contributions?
- What happens if one partner contributes significantly more later?
- Can ownership be diluted or transferred?
- What restrictions exist on selling to an outside party?
- Do we need a shotgun clause or right of first refusal?
- What happens to ownership if a partner is removed for cause?
Capital Contributions
- How much money is each partner investing, and when is it due?
- Is the investment a loan or equity?
- Are partners expected to contribute more capital later?
- What happens if someone can’t contribute?
- Does additional investment change ownership?
- Can partners loan money to the business, and who approves it?
- What happens if the business needs emergency funding?
- How are personal guarantees handled?
- What happens if only one partner is willing to personally guarantee a loan?
- Are contributions reimbursed if the business fails?
Roles & Responsibilities
- What is each partner responsible for?
- Who is the CEO, and who oversees sales, marketing, operations, and finance?
- Who hires and fires employees?
- What decisions can each partner make independently?
- What happens if someone consistently doesn’t perform?
- Who represents the company publicly?
- Who has final say in their own department?
- What happens if departments disagree on shared decisions?
- How do we handle it if one partner oversteps into the other’s role?
- Are titles fixed, or can they change as the business grows?
Time Commitment
- Is this full-time or part-time for each partner?
- Can either partner have another job?
- How are vacations and sick days handled?
- What happens during parental leave or a medical event?
- What happens if someone burns out?
- How often do partners meet, and is attendance mandatory?
- What happens if one partner consistently works significantly fewer hours?
- How is accountability measured, and by whom?
- What happens if a partner wants to relocate away from the business?
- Is there a minimum hours expectation in writing?
Compensation
- Will partners receive salaries, and when do they begin?
- How are raises and bonuses determined?
- How are profits distributed, and how much stays in the business?
- Can distributions be unequal even if ownership is equal?
- Who approves compensation changes?
- What happens if the business loses money?
- What happens if one partner wants to defer compensation and the other doesn’t?
- Are partners paid the same regardless of role or hours?
- What happens if a partner takes an outside consulting fee related to the business?
- How is compensation revisited as the company grows?
Banking & Accounting
- Who has access to bank accounts, and who can sign checks?
- What purchases require multiple approvals?
- Which accounting method will we use, and who selects the CPA?
- How often do we review financial statements, and what reports does every partner receive?
- What qualifies as a legitimate business expense?
- How are reimbursements handled, and what documentation is required?
- Who has read-only versus edit access to financial systems?
- What happens if a partner disputes an expense after the fact?
- Are personal and business expenses ever allowed to blend?
- Who is responsible for tax filings and deadlines?
Decision Making
- Which decisions require unanimous approval, and which can be made independently?
- Can either partner veto a major decision, and what counts as “major”?
- What spending limit requires partner approval?
- What happens when we disagree — will mediation or arbitration be required?
- Who breaks a tie?
- How are emergency decisions made when a partner is unreachable?
- How are important decisions documented?
- What decisions, once made, can’t be reversed without full agreement?
- Who has authority to sign contracts on behalf of the business?
- What happens if a partner makes a unilateral decision outside their authority?
Growth & Outside Influences
- Can we bring on investors or add another partner?
- Can either partner own or invest in another business?
- Can either partner compete with this business after leaving?
- Who owns the intellectual property, customer lists, and brand if the partnership dissolves?
- What role, if any, do our spouses or significant others have in business decisions?
- What happens if one partner wants to grow much faster than the other?
- How are major expansion decisions made?
- What happens if a partner wants to franchise or license the concept?
- Who controls the company’s public image and social media presence?
- What happens if a partner wants to bring in a family member to work in the business?
Exit Strategy
- What happens if someone wants out, and how is the business valued?
- Who performs the valuation, and who pays for it?
- Can ownership be purchased over time rather than in a lump sum?
- What happens if a partner dies or becomes disabled?
- What happens during a partner’s divorce?
- What happens if a partner files for bankruptcy?
- Who gets the first opportunity to purchase a departing partner’s ownership?
- Is there a non-compete or non-solicitation period after exit?
- What triggers a forced buyout of a partner?
- After answering every one of these conversations honestly… would we still choose each other as business partners today?
Final Thoughts
If you’ve made it this far, congratulations.
You’ve already done something that most business partners never do.
More importantly, you’ve probably disagreed on a few things.
That’s a good thing. Those disagreements are exactly why this exercise exists.
You now have something most partnerships never bother to create before they need it: a record of what you actually agreed to, and where you didn’t.
That record is the raw material for your operating agreement. Bring your notes and your recording to an attorney — or use AI to help organize it first — and build something that reflects your business, not a generic template pulled off the internet.
An operating agreement isn’t paperwork. It’s your agreement on how you’re going to operate together.
And if these 100 questions save your partnership — or help you realize you shouldn’t have one in the first place — they’ve already done their job.
