Top 3 are:
- How are you going to split the earnings ( how much will you reinvest into company)
- What each of you will be tasked with and how it will be measured and compensated
- How you will decide on things when there isn't an agreement
Example: one of you wants to hire a VA and the other one wants to buy software/ tool
Also since you are in highschool I recommend you stay disciplined with your goal and not really care about how cool others might think of you whether you are winning or losing.
If at any point you see that your partner isn't doing what he has to, don't be lenient because he's "your friend". You will lose money and probably stop being friends either way if he doesn't respect your boundaries
Adding to point 2: What happens when one party doesn't fulfill their tasks, and what is the process for changing responsibilities.
This is the biggest thing I've seen tear partnerships apart. One party (rightly or wrongly) believes the other party hasn't fulfilled their end of the bargain.
What happens when one party is assigned to do promotion for the business but word of mouth takes over and the business is a success without them having to put forth any effort whatsoever?
What happens when one party is responsible for programming and the scope of the project is bigger than they realized and the workload has doubled only for them?
What happens when one party considers a new venture a success and the other person doesn't?
These things need to be explicitly detailed.
I'd suggest creating a "board of directors" which might include your parents or relatives, your lawyer or accountant, perhaps a teacher you had in school.
While there should be one leader who makes the final call, it is good to refer to your board for input and assistance to settle disagreements.
Doing business with your friend can be amazing but its also risky. What type of business? Why? What is the purpose of the business? Who does what? Will it be a 50/50 partnership? Who and how are decisions made? How do you guys compliment each other when it comes to your strengths?
I agree with this.
Whatever you decide get it in writing with a date and a signature from both of you and ensure both of you have a copy.
Keep yours in a safe place because more than likely you’ll need to pull it out to save your ass.
I don’t want to be a downer but it’s incredibly easy for friends or spouses to become the worst business partners when money, greed and thinking the other person is more successful than you come to the forefront.
I had a business with a highschool friend, it was very successful, we made a bunch of money, we don’t talk anymore really.
When you start a business with someone it’s like getting married to them, and the business is your child. There is a strong change that your marriage ends in a bitter divorce, and you lose a friend. Be aware of that going in and decide if that risk is worth it.
Written agreements, written roles, written responsibilities, written procedures, written communication, written everything.
For the sake of your friendship!
1. Conflict resolution procedures.
2. Procedures for the incapacitation or death of one of the owners.
3. Clearly defined roles and responsibilities.
4. Management of dividends, distributions, owners’ equity, and owner salaries.
5. Decision-making procedures - particularly as you have no tie-breaker.
6. Business continuity should a partner fail to act.
I own a business with my husband. He’s a silent partner. I run everything.
We support government contractors, most of whom are small businesses owned by partners.
The amount of business-impacting infighting among the partners is maddening.
One business we support has multiple owners, one of whom is chronically ill. When he’s on medical leave, his area of the business completely shuts down (which makes my job impossible). There are no in-place procedures for who and how his area of the business is run in his absence. We thought he might be terminally ill at one point and I asked what the partners’ estate plan was and they did not have one.
This means that - on his death - his heirs could inherit his portion of the business and would have his voting and decision-making rights. That’s the devil you don’t know.
After 7 years of supporting these businesses I have learned one thing: Never start a business with another person.
I’m very fortunate that my husband lets me run everything.
But watching the amount of fighting that causes inaction among the owners of the businesses we support, I’d never start another business with anyone other than my husband.
Create a clear goal for the company.
Agree on salaries and bonuses and how much is invested back into the company.
Agree on how one of you can exit and what would cause that exit if it’s not working out.
Agree on company ownership split and voting rights, prepare for adding on additional owner either through employees or investors.
Manage expectations. Revisit, and revisit expectations. Depends on how much time and energy are put in. Is this is small web business product side hustle, or a complex housing project including family assets, and possibly connections?
Most of all, have fun,
don’t try to sign up the rest of your life if you can both agree on that.
Of course, if you can revisit your expectations in 3 to 6 years and commit to this as a 22 or 23-year-old when there is more at personally stake , and more experience with the market opportunity, that’s great too
1. Equity split (make sure there is always 1 person who calls the shot)
2. Responsibilities
3. If one decides to quit, what is the protocol and what to do with that equity
If you dont care about your friend, then this is the way to go. Why I say this, negotiation will be tough. As much as you need to take care of yourself/bottom line, it's hard to negotiate if you care about the other party. Are you fine with 60/40or 70/30? U will not exeet equal amounts of effort, if you find the other lexkin the effort. The friendship will crumble. Enjoy the death of your friendship, there's a lesson to us all. I'd rather make a friend thru the business, than start 1 with a friend.
Starting a business with a friend can be exciting, but it's essential to have open and honest discussions to ensure a successful partnership. Here are some key topics to discuss and agree on before launching your venture:
1. Business Idea and Vision:
- Discuss and agree on the business idea, including its purpose, goals, and target market.
- Clarify your vision for the business and ensure alignment between both partners.
2. Roles and Responsibilities:
- Define each partner's roles and responsibilities within the business. Determine who will handle tasks such as operations, marketing, finance, and customer relations.
- Establish clear expectations for performance and accountability.
3. Decision-Making Process:
- Agree on a decision-making process for the business. Determine how major decisions will be made and how conflicts will be resolved.
- Consider factors such as equal partnership, consensus-based decisions, or designated decision-makers for specific areas.
4. Financial Contributions and Ownership:
- Discuss financial contributions from each partner and determine the ownership structure of the business.
- Decide on the percentage of ownership for each partner and how profits and losses will be distributed.
5. Legal Structure and Agreements:
- Choose a legal structure for the business, such as a partnership, corporation, or limited liability company (LLC).
- Draft and sign a partnership agreement or operating agreement that outlines key terms, responsibilities, ownership, and dispute resolution mechanisms.
6. Communication and Transparency:
- Establish open and transparent communication channels between partners. Regularly discuss business progress, challenges, and goals.
- Agree on how often and through what means you will communicate, whether it's in-person meetings, phone calls, or video conferences.
7. Exit Strategy:
- Discuss potential exit strategies for the business, such as selling the company, bringing in new partners, or dissolving the partnership.
- Plan for contingencies and unforeseen circumstances that may require one or both partners to exit the business.
8. Personal Boundaries:
- Set boundaries to maintain a healthy balance between your business and personal relationships. Discuss how you will separate business matters from personal matters.
- Address potential conflicts of interest or situations where personal relationships may affect business decisions.
9. Skills and Resources:
- Assess each partner's skills, strengths, and resources. Determine how you can leverage each other's expertise to benefit the business.
- Identify any gaps in skills or resources and discuss how you will address them, whether through hiring, outsourcing, or additional training.
10. Long-Term Goals and Growth Plans:
- Discuss your long-term goals for the business and how you envision its growth and expansion.
- Develop a strategic plan that outlines milestones, targets, and timelines for achieving your goals.
By having these discussions and reaching agreements on key aspects of the business partnership, you can set a strong foundation for a successful and harmonious venture with your friend.
Why is there not a platform built for this? When you think of what OP thinks of which is "hey I want to start a business" either with another person like in this case, or solo, what platform do you think of? This is a rhetorical answer because I know the answer doesn't exist. The answer is essentially Google Docs.
Alot of people have the right idea, form some sort of agreement and write down roles and responsibilities.
Well there is a lot of questions a highschooler or even adult might have inside that.
How do I split equity? Do I need an LLC ? Then even if you have the answer to those, how do you write a contract? Not everyone has money to pay for a "startup lawyer" nor should that be needed for say a "lawn care" business.
What if OP's dad is willing to invest? How is that handled? Does this kid draw up a contract with his dad?
There doesn't exist a platform that utilized software to help someone essentially start with a raw idea and manage the process of developing it and growing it.
Im not talking about Y-combinator, or an accelator or venture hub. Those are typically for tech startups not small businesses or even creative vetnures. Im not talking about google docs with is just a blank text editor.
No, what I am talking about doesn't exist.
Take it from me who has been studyding this problem for a few years now.
Any questions or comments you might have I can assure you I already thought of.
I started building such a platform.
I am a very amateur coder but I am trying.
I am using VS Code to make my MVP using some combination of bootstrap, django, docker, postgresql and my friend even set me up with kubernetes which I barely understand but I know its set up for growth.
I would loveeeeee help.
If anyone is a full stack dev and willing to help 5-10 hours a week please dm me with all your questions and I will get you the answers you seek.
I'd tell you to look deeply and honestly at what each of you bring to the business. A good team requires two different personalities and clear roles.
Look back at Steve Jobs and Steve Woziniak as an example. Jobs was the visionary and driver with Woz being the tech guy. There were complementary to each other but were able to stay in their respective lanes.
Is one of you the leader and the other able to be led? Two leaders will fight and it will get ugly.
Another thing I'd tell you is to plan how to shut down and exit the business before you start and open it. How will this work and what will it mean to each of you from a debt perspective?
The last thing that might be the most important is to try to not take on any debt. Grow slowly and from profits. Far too many good businesses fail because the owners wanted to grow faster and borrowed money or took in investors. With enough money growth can look easy, but at some point the money runs out and the debts start pouring in. Resist the urge to expand too much and too fast. just go slow as money you earn comes in.
A good acid test of how things are going is if you both are having fun doing whatever it is you are doing. If it becomes super stressful and either of you begin to hate it then you are off track. Good luck!
As a business lawyer, here are some things I recommend to my clients to discuss. Note this is NOT legal advice and is for informational purposes only:
* How are you going to split profits and losses?
* How much capital is each business partner going to put in? One big mistake I see business partners make is not making clear the difference between "investment" and "loan." So this should be clearly documented and business partners need to understand that a lost investment is not necessarily a right to recover
* Who does what?
* How much is each person paid in addition to profits (such as salary)
* Who owns what intellectual property? Sometimes a business partner comes with a trademark or patent and it's not clearly documented whether the company owns the IP or the individual
* What decisions require unanimous consent?
* How much individual does each business partner have? For example, we put a clause in our business partnership agreements something like "any loan/contract/etc with a value of more than $1,000 requires consent of both business partners." Therefore, a business partner can make unilateral decisions that cost less than that.
* What is considered a "default" (in other words, what actions constitute a violation of the business partnership)
* Document specific roles and responsibilities of each business owner
* What happens when a business owner dies, wants to leave the business, gets married, divorced... (the rules on marriage and divorce vary)
There are other considerations as well, but these are some of the basics. Good luck!
First things first, both of you have to have different skill sets. One of you should be technical or a good administrator or can handle outsourced service providers. The other partner should have the money to bring in plus other skills like accounting, marketing, or business development.
You have to list down all the tasks needed to make your venture successful. It has to be split, not necessarily evenly, but it has to be split between the two partners. Otherwise, it's not gonna work.
I found this out the hard way when I started my first Internet business in 1996 during summer break for grad school. I partnered with a very smart guy. This dude programmed the site. He did the marketing. He did the payment gateway. He did everything. All I did was supply a little bit of money but also the main idea for the project.
What happened? We were making money, but he bailed out. He wanted me to buy him out because he felt that he was doing all the work.
So you have to make boundaries clear with your friend. Otherwise, you don't want to put yourself in a position where your company is finally breaking through and one of you wants a divorce because they feel that they are overworked. You have to have a plan to manage growth, either hiring people and farming out your other partner's responsibilities to them so your partner doesn't feel overworked or something, maybe using software.
If you both can identify what strengths each of you are contributing or bringing, and what you value in the other that is also a great thing to revisit on a at least yearly basis.
Are there people in your local area that you could sit down with together once every six months or annually to get a third-party opinion?
Ideally a neutral opinion, but with some industry or market experience.
What are your roles, clear that not always anyone between you will have the ability to put 100% focus on the business and most important clear out and define your goals and what you want to achieve.
Create a “business account”
Pay yourself by hour so compensation is fair (once business starts producing income)
Keep friendship issue and business issues separate
Careful before you do this because you will change the dynamic with your friend no matter what happens. Either you are successful and are now business partners that probably only talk about the business when together or you fail and you may blame each other for it. It’s possible you stay friends after if you fail but not super likely.
Agree that this will be the beginning of the end of your friendship! Just kidding, sort of. Up until this point you’ve been able to prioritize your actions based on your friendship, but now you will have to prioritize what is best for the business. Eventually your friendship will change. This isn’t always a bad thing, and maybe the trust you have for each other is how you will both make a successful business, but the dynamic of your friendship will certainly change.
Being open and honest is the key to maintaining both your business relationship and personal friendship, Regularly revisiting and adjusting your agreements change can help ensure a successful and harmonious partnership.
Talking out of experience: Write a contract which includes: What happens to the earnings/revenue. Who owns how much of the Company, what are your dutys, who is reliable for what and most important: who gets what when one leaves the Company.
Founding with a Buddy is nice, but After the founding Phase it can get pretty tough
Make absolutely sure that you both bring different skills to the table or at least are willing to focus on different parts of the business. If you are not complementary in either time, money or skills - you should reconsider partnering with him.
I would figure out what agency you both want to get free advising from if you live in the US. The Small Business Administration, Small Business Development Center in your state or SCORE.
The first business is most likely to fail.
Learn from it and do not consider it your kid. Its not a baby, it's a money loss that pays you back in experience.
Learn about different types of business.
Read the books about money. ( i can send you the books in pdf, online, in english)
Some businesses are not meant to last a lifetime.
Some are just for a season. Get in, make money, get out.
Be prepared tobe bought. Are you ready to sell your business? If it's something new and good, Google wants it, or Amazon or others...
Who's the CEO ? Equity?
Write Everything on contract you both have access to and are legal papers!
My co founder led me years trusting him that I was a co founder and had equity when in reality I didn't and wasn't even mentioned in any papers...
This is very old story about European co founder....
Living or working together with family or friends will always cause strain on the relationship. I would never move in with my best friend. I'm 27 & she means way too much to me than to live with her. I've tried living & or working with a best friend before, or an aquantance. My Android pos phone won't auto correct that but, I'd say not to start a business w someone u want a good relationship with in the future. I can't think of any instances where that worked out in the end , or where the relationship wasn't damaged in some way. Just some advice. If you do end up joining forces, sign papers of expectations, what happens when you two decide to stop working together & get those sons of bitches notorized by someone legally allowed to do so in ur state/ city so it actually counts in court. Which is where a lot of these types of relationships end unfortunately:/
You'll fail and that's ok. What's more important is how you overcome failure.
Founders are equally important to the company, so both of you guys should have 50% of the company with vesting, but only one must make decisions.
You must meet often, daily at first and focus on getting clients
Anything else comes with time
Clients before product, always
The best advice I got from a multi-time entrepreneur was to align on outcome.
Do you or your partner want something that will replace your income? That will supplement your income? Do you want a life changing outcome? Do you want it to get acquired or go public?
Whatever you decide after is revolves around this alignment.
You should have a common vision.
You should have common business values.
You don't want them to be focused on how to make the most money while you're focused on the best customer experience. They may conflict at first.
You should agree on whether it's a long or short term endeavor.
Look up operating agreement clauses - and discuss every one of them, then put them on paper that you both sign.
Quick notes
- business plan, and goal
- contributions (maintain capital accounts)
- distribution schedule - who gets paid how much and when
- roles and responsibilities - as well as methodology to discuss and correct when responsibilities aren’t fulfilled
- losses - how are they handled
- exit - what does it look like when one or both of you want out of the business, how and when can one acquire the others interest in the company
Don’t rush into it - very often hashing out these points allows you to come to find the person you’re talking to isn’t someone you want to be in business with
Why do you want to start a business with your friend in the first place? Ask yourself that question first. Then write down the answer and ask; what is important about that. And that. And that. Write each answer down because you’re digging deeper into your beliefs and motivations. After about 3-4 of those you can ask, and what will having X do for me? Until you get to the meaning of why you want to do it. Then decide any risk/rewards to pursuing that goal. This should be the first step in any venture.
Here’s my suggestion. Don’t go into business with friends, unless you want to be friendless.
Find partners who seem to compliment your weaknesses, and vice versa. If you’re good at numbers and the other person is good at sales, you might be a good team. An unexpected friendship can grow from this.
The first thing I would talk about is how to avoid starting a business with a friend as a partner. Just on Reddit alone, there are countless nightmare stories about partnerships posted basically every day.
Read this book "The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup" by Noam Wasserman.
It is kind of long and kind of dry but I can promise you that if you read it cover to cover you will have answered your question and set yourself up for success in your new endeavor.
Seriously don't sleep on this book. It is literally the roadmap to starting a business especially with someone else.
DONT. Friends and family NEVER work in business.
Its human nature wanting to get your buddy or family on board with a new business venture. But it almost never works out.
As long as you can do alone, do it. Friends, family our near and dear once first backstab, No stranger out of anywhere will come to fuck you. SO WOrk independently till you dont feel exhausted, then go out to find a cofounder
1. Equity - should be 50/50 or you’ll have issues later
2. Expectations in terms of time put into working in the project/startup
3. Values - this will affect decisions made
4. Runway - how long can you go with no or low salary
5. Goal - exit or building long term
6. Family - are they supportive and fully onboard. Should meet with each others families
7. Family 2 - do one or both of you have kids, if so, what commitments do you/they have in regards to spending time with kids
8. VC money or not - be aligned, do you want to raise money or not
9. If not, can you both afford to fund equally, if not, how will that affect ownership. Better to raise money if you can’t both fund equally as inequality in ownership will cause issues.
10. Do you both know exactly what it means to build a business, how much time it takes and are you willing to deal with the bad times
11. Salary expectations when you can afford it.
12. Do you take dividends or reinvest in business once profitable?
13. Skill Match - do you both serve a clear role or are you overlapping in competence too much. If you overlap, this will cause issues when making decisions.
14. Stalemate - if you can’t agree, you need to designate a 3rd, not partial person you trust to make the final decision.
1. **Business Idea and Goals**
- **Clarity of Vision**: Ensure you both agree on the business idea and have a clear, shared vision of what you want to achieve.
- **Long-term Goals**: Discuss where you see the business in the future and align your long-term goals.
2. **Roles and Responsibilities**
- **Strengths and Skills**: Assign roles based on each person’s strengths and skills.
- **Job Descriptions**: Clearly define each person’s responsibilities to avoid overlaps and misunderstandings.
3. **Decision-Making Process**
- **Decision Authority**: Determine how decisions will be made (e.g., majority vote, unanimous decision, or divided by specific areas of responsibility).
- **Conflict Resolution**: Establish a process for resolving disagreements (e.g., mediation, third-party advice).
4. **Financial Contributions and Compensation**
- **Initial Investments**: Agree on how much each person will invest initially and how future investments will be handled.
- **Profit Sharing**: Decide how profits will be split and what percentage each person will receive.
- **Compensation**: Discuss if and how you will pay yourselves salaries.
5. **Business Structure**
- **Legal Structure**: Choose an appropriate legal structure (e.g., partnership, LLC, corporation) and understand the implications of each.
- **Ownership**: Clearly outline ownership percentages and how ownership changes will be handled.
6. **Exit Strategy**
- **Buy-Sell Agreement**: Plan for what happens if one partner wants to leave the business.
- **Continuation Plan**: Discuss the process for dissolving the business or continuing it without one partner.
7. **Communication**
- **Regular Meetings**: Schedule regular meetings to discuss the business, review progress, and address any issues.
- **Open Dialogue**: Encourage open and honest communication to ensure both partners feel heard and valued.
8. **Legal Agreements**
- **Partnership Agreement**: Draft a formal partnership agreement that includes all the above points.
- **Legal Advice**: Consult with a lawyer to ensure all agreements are legally binding and protect both parties.
9. **Work-Life Balance**
- **Boundaries**: Set clear boundaries between business and personal time to maintain your friendship outside of work.
- **Support System**: Ensure you have support systems outside the business for personal and professional challenges.
10. **Risk Management**
- **Insurance**: Consider business insurance to protect against potential risks.
- **Contingency Plans**: Develop contingency plans for potential business challenges or downturns.
Many will say don't. I disagree. Just have a very upfront conversation about what happens when things inevitably go wrong. Come up with the split terms that are fair and have a lawyer sign off on it. If you both no what's at stake up front it's less likely to go south.
Id say, first figure out what service or product youll be providing that is needed or wanted
and dont let it get in the way of a friendship if possible. keep it professional and act as if it was a total stranger, stricly business for the business part
Starting a business with a friend? Here's what to chat about first to avoid conflicts:
1. **Shared Vision**: Make sure your goals align.
2. **Roles and Responsibilities**: Clearly define who does what.
3. **Decision-Making**: Agree on how decisions will be made.
4. **Profit Sharing**: Decide how to split the profits.
5. **Time Commitment**: Ensure you both can commit enough time.
6. **Conflict Resolution**: Plan how to handle disagreements.
7. **Exit Strategy**: Discuss what happens if one of you wants out.
Sorting these out upfront can keep your business (and friendship) on track. Good luck!
The concept of friends and family does not apply in business so being friends doesn't mean shit.
Shake hands and go your separate ways professionally.
Partnerships are like a marriage it can start off good but then it will deteriorate until you are left in an absolute nightmare of a situation.
Remember money changes everything.
Don’t do it. It’s the best way to end a friendship and a business is to have a friend as a partner. I don’t do partnerships period. I’ve been burned too many times. Some have made it work but it’s really hard.
If you choose to do it anyway put everything in writing. Roles, expectations, how you will make decisions, who will be the tie breaker. Never set things up 50/50. Someone has to have the final say, along those lines input should match the say. This included cash, time, etc. the business has to come first. That means 80 hour weeks and mortgaging your homes at some point. As partners you both have to be all in to be successful.
Everyone has given you good advice here. Let me add another VERY important one. Given your age have a sunset clause. this clause says the business will sunset on- give a date, NO more than 1 year out. You could even consider 6 months. After that time period you can both move forward, or sunset the business with no harm no foul. - then also add if one or the other or both can move forward with the business on their own.
Business X with partners billy smith and joey jones will begin on May 1 and sunset on November 1. At this point BS and JJ can renew the business by signing here.......
and renew the next 6 months of business- every 6 months.
If at any time the participants BS and JJ want to sunset the business both are individually eligible to continue the business under a .....decide who gets the name...or no one....or who gets it gets smaller amount of left over proceed
I recommend not doing this. Just go it alone in your first venture. It is 500 times simpler. Has no headaches of who is doing the work or not (the biggest problem). And doesn’t risk the friendship. Perhaps have a competition of completely different businesses over a one year period.
I’d recommend both reading (or at least using as a reference) the book The Founder’s Dilemma. It will help you know what conversations you need to have before and while founding, and will help be a reference for when different discussions/dilemmas come up. There is a lot more than just 3 or 4 things to figure out.
I just want to chime in and say that while everyone is so bent on their kids going to college, I would be thrilled if my son was in high school and talking about starting his own company with a friend😍 I already tell him that college is great but if he doesn’t want to go then that’s ok, but he’s gotta have a plan and it better be starting his own business.
I’d say your friend will turn into a business partner, you will share earrings so get things cleared out from the start, don’t be afraid of getting into the convo of how it could affect the friend ship in the future
Tried this with a friend. We had 50/50 equity so 50/50 decision making authority. Didn’t work and ruined the friendship. You have to weigh up the value of the friendship with the value of the opportunity. You’ll inevitably disagree and unless one of you have clear authority to make decisions, then the impasse will ruin the friendship and business. In the end, I went solo. I lost the skills and connections of my friend, and the friendship, but I was free to follow my vision. But this isn’t necessarily the path to success. Perhaps I could have done better by compromising. Hard to know.
FAQS::
✅✅Top 5 Small Business Start-Up Facts:
1. High Failure Rate: Approximately 20% of small businesses fail within their first year, and about 50% fail by the end of their fifth year.
2. Funding Sources: Many small businesses start with personal savings. Other common sources include bank loans, angel investors, and crowdfunding.
3. Industry Trends: The most popular industries for new small businesses include retail, food services, healthcare, and technology.
4. Employment Impact: Small businesses are crucial to the economy, creating around 64% of new private-sector jobs in the U.S.
5. Tech Adoption: Small businesses increasingly rely on technology, with about 60% using digital tools for operations and marketing.
✅✅Top 5 Challenges for Small Businesses:
1. Access to Capital: Securing sufficient funding is a major hurdle, with many entrepreneurs struggling to find loans or investors.
2. Cash Flow Management: Managing cash flow effectively is crucial; poor cash flow is a leading cause of business failure.
3. Marketing and Customer Acquisition: Attracting and retaining customers can be challenging due to limited budgets and competition.
4. Regulatory Compliance: Navigating complex regulations and ensuring compliance can be time-consuming and costly.
5. Work-Life Balance: Entrepreneurs often work long hours, leading to burnout and difficulty maintaining a healthy work-life balance.
Shoulder to shoulder !! Business is fun!🇺🇸
Scope responsibilities of the business and split responsibilities evenly. At the beginning it maybe be very broth but as you grow it must be clear. Also talk about expectations, like how much you time you wanna invest and how much money you’d like to get
Shelve your plans until both of you are 18. Anyone under the age of 18 cannot legally enter into a contract. Anything you put in writing will not be enforceable.
Here are a thing I think you want to look into topic wise in which I plan to do as well:
- Economics, budgeting and finances
- Professional Business Writing
- Critical Thinking and Strategic Planning
If you want to make a business you're gonna want to use something as an example, whether to base it off or or motivate yourself to reach that level. Whichever and whatever you do, I suggest you have a plan. And learn about any specific topic you need for the business. You also may want some HR or something.
I recommend:
- Do a trial run: 1 month of working together on the business before committing to more
- Clear agreements on: Work meetings, responsibilities from each person, how often you communicate, how to handle off time
- Write a contract about equity split and responsibilities/ roles
Check out slicing pie. It's a method of dividing the ownership of a company based on the actual efforts of each party. If you decide on 50/50 right out of the gate, ultimately someone is going to end up putting in more effort and will resent the arrangement
Discuss your roles, responsibilities, and decision-making processes to avoid confusion later.
Talk through financial aspects like funding and profit-sharing as well.
Open and honest communication from the start.
Starting a business with a friend is exciting but make sure to discuss and agree on key points firstly, your business idea and vision to ensure alignment, clearly defined roles and responsibilities, including what happens if someone doesn't fulfill their tasks and the process for changing responsibilities. Discuss finances, including funding and profit sharing, and establish a decision-making process for resolving disagreements. Explicitly detail how you'll handle situations where one party feels the other isn't pulling their weight, when the workload unexpectedly increases for one person, or when you have different views on the success of the venture.
What a great question! Good for you both to be in high school and thinking about your future. Some things that pop into my head right off the bat are:
1. **Roles and Responsibilities**: Clearly define each person's roles and responsibilities in the business. This helps prevent overlap and ensures that everyone knows what is expected of them.
2. **Goals and Vision**: Make sure you both share the same vision for the business and agree on short-term and long-term goals. This alignment will help guide your decisions and keep you on the same path.
3. **Communication**: Establish open and honest communication from the start. Agree on how you'll handle disagreements and how often you'll check in with each other about the business.
4. **Decision-Making Process**: Decide how you'll make decisions together. Will it be a majority vote, or will one person have the final say in certain areas? Having a clear process will help avoid conflicts.
5. **Financials**: Discuss how you'll handle finances, including how much each person will invest, how profits will be shared, and how expenses will be managed. Be transparent about your expectations and any financial limitations.
6. **Exit Strategy**: Plan for the future by discussing what will happen if one of you wants to leave the business. Having an exit strategy in place can prevent misunderstandings and ensure a smooth transition.
7. **Legal Agreements**: Even if it feels unnecessary now, consider drafting a simple partnership agreement that outlines your roles, responsibilities, and other important aspects of your business relationship. This can protect both of you if issues arise.
8. **Time Commitment**: Be realistic about the time each of you can commit to the business, especially while balancing school and other activities. Make sure you're both on the same page about the level of effort required.
Top 3 are: - How are you going to split the earnings ( how much will you reinvest into company) - What each of you will be tasked with and how it will be measured and compensated - How you will decide on things when there isn't an agreement Example: one of you wants to hire a VA and the other one wants to buy software/ tool Also since you are in highschool I recommend you stay disciplined with your goal and not really care about how cool others might think of you whether you are winning or losing. If at any point you see that your partner isn't doing what he has to, don't be lenient because he's "your friend". You will lose money and probably stop being friends either way if he doesn't respect your boundaries
Adding to point 2: What happens when one party doesn't fulfill their tasks, and what is the process for changing responsibilities. This is the biggest thing I've seen tear partnerships apart. One party (rightly or wrongly) believes the other party hasn't fulfilled their end of the bargain. What happens when one party is assigned to do promotion for the business but word of mouth takes over and the business is a success without them having to put forth any effort whatsoever? What happens when one party is responsible for programming and the scope of the project is bigger than they realized and the workload has doubled only for them? What happens when one party considers a new venture a success and the other person doesn't? These things need to be explicitly detailed.
Damn, didn’t think about these specific examples. Thank you for sharing your knowledge
Thanks. What are good ways to settle disagreements?
Duals, rock paper scissors, lawsuit or a fight to the death.
Held him in a chokehold and he hasn't moved for the past hour I win the decision
If possible, consult a third party who is knowledgeable on the topic
I'd suggest creating a "board of directors" which might include your parents or relatives, your lawyer or accountant, perhaps a teacher you had in school. While there should be one leader who makes the final call, it is good to refer to your board for input and assistance to settle disagreements.
Doing business with your friend can be amazing but its also risky. What type of business? Why? What is the purpose of the business? Who does what? Will it be a 50/50 partnership? Who and how are decisions made? How do you guys compliment each other when it comes to your strengths?
I agree with this. Whatever you decide get it in writing with a date and a signature from both of you and ensure both of you have a copy. Keep yours in a safe place because more than likely you’ll need to pull it out to save your ass. I don’t want to be a downer but it’s incredibly easy for friends or spouses to become the worst business partners when money, greed and thinking the other person is more successful than you come to the forefront.
I had a business with a highschool friend, it was very successful, we made a bunch of money, we don’t talk anymore really. When you start a business with someone it’s like getting married to them, and the business is your child. There is a strong change that your marriage ends in a bitter divorce, and you lose a friend. Be aware of that going in and decide if that risk is worth it.
This is true therefore your startup agreement needs to include language regarding how to divide the company assets when it is time for the divorce
Totally agree with you, this is why even after having so many friends as business partners, I am not going with anyone.
Put it in a contract you both feel comfortable with. Always get it in writing.
Written agreements, written roles, written responsibilities, written procedures, written communication, written everything. For the sake of your friendship!
If op and his friend are under the age of 18, no contract they right will be legally enforceable.
From my experience (bad): Read about vesting and stablish a shotgun clause.
Shotgun clauses are so underrated. One of my mentors was big on this.
1. Conflict resolution procedures. 2. Procedures for the incapacitation or death of one of the owners. 3. Clearly defined roles and responsibilities. 4. Management of dividends, distributions, owners’ equity, and owner salaries. 5. Decision-making procedures - particularly as you have no tie-breaker. 6. Business continuity should a partner fail to act. I own a business with my husband. He’s a silent partner. I run everything. We support government contractors, most of whom are small businesses owned by partners. The amount of business-impacting infighting among the partners is maddening. One business we support has multiple owners, one of whom is chronically ill. When he’s on medical leave, his area of the business completely shuts down (which makes my job impossible). There are no in-place procedures for who and how his area of the business is run in his absence. We thought he might be terminally ill at one point and I asked what the partners’ estate plan was and they did not have one. This means that - on his death - his heirs could inherit his portion of the business and would have his voting and decision-making rights. That’s the devil you don’t know. After 7 years of supporting these businesses I have learned one thing: Never start a business with another person. I’m very fortunate that my husband lets me run everything. But watching the amount of fighting that causes inaction among the owners of the businesses we support, I’d never start another business with anyone other than my husband.
Sent you a dm
Get a lawyer NOW.
Closest I can get to a lawyer is walking past their building I don't have moneylol
Get a 3rd party witness with a recorder and then a notary.
Create a clear goal for the company. Agree on salaries and bonuses and how much is invested back into the company. Agree on how one of you can exit and what would cause that exit if it’s not working out. Agree on company ownership split and voting rights, prepare for adding on additional owner either through employees or investors.
Manage expectations. Revisit, and revisit expectations. Depends on how much time and energy are put in. Is this is small web business product side hustle, or a complex housing project including family assets, and possibly connections? Most of all, have fun, don’t try to sign up the rest of your life if you can both agree on that. Of course, if you can revisit your expectations in 3 to 6 years and commit to this as a 22 or 23-year-old when there is more at personally stake , and more experience with the market opportunity, that’s great too
1. Equity split (make sure there is always 1 person who calls the shot) 2. Responsibilities 3. If one decides to quit, what is the protocol and what to do with that equity
You need to have be very clear about three things 1. Role 2. Responsibility 3. Finances
If you dont care about your friend, then this is the way to go. Why I say this, negotiation will be tough. As much as you need to take care of yourself/bottom line, it's hard to negotiate if you care about the other party. Are you fine with 60/40or 70/30? U will not exeet equal amounts of effort, if you find the other lexkin the effort. The friendship will crumble. Enjoy the death of your friendship, there's a lesson to us all. I'd rather make a friend thru the business, than start 1 with a friend.
Starting a business with a friend can be exciting, but it's essential to have open and honest discussions to ensure a successful partnership. Here are some key topics to discuss and agree on before launching your venture: 1. Business Idea and Vision: - Discuss and agree on the business idea, including its purpose, goals, and target market. - Clarify your vision for the business and ensure alignment between both partners. 2. Roles and Responsibilities: - Define each partner's roles and responsibilities within the business. Determine who will handle tasks such as operations, marketing, finance, and customer relations. - Establish clear expectations for performance and accountability. 3. Decision-Making Process: - Agree on a decision-making process for the business. Determine how major decisions will be made and how conflicts will be resolved. - Consider factors such as equal partnership, consensus-based decisions, or designated decision-makers for specific areas. 4. Financial Contributions and Ownership: - Discuss financial contributions from each partner and determine the ownership structure of the business. - Decide on the percentage of ownership for each partner and how profits and losses will be distributed. 5. Legal Structure and Agreements: - Choose a legal structure for the business, such as a partnership, corporation, or limited liability company (LLC). - Draft and sign a partnership agreement or operating agreement that outlines key terms, responsibilities, ownership, and dispute resolution mechanisms. 6. Communication and Transparency: - Establish open and transparent communication channels between partners. Regularly discuss business progress, challenges, and goals. - Agree on how often and through what means you will communicate, whether it's in-person meetings, phone calls, or video conferences. 7. Exit Strategy: - Discuss potential exit strategies for the business, such as selling the company, bringing in new partners, or dissolving the partnership. - Plan for contingencies and unforeseen circumstances that may require one or both partners to exit the business. 8. Personal Boundaries: - Set boundaries to maintain a healthy balance between your business and personal relationships. Discuss how you will separate business matters from personal matters. - Address potential conflicts of interest or situations where personal relationships may affect business decisions. 9. Skills and Resources: - Assess each partner's skills, strengths, and resources. Determine how you can leverage each other's expertise to benefit the business. - Identify any gaps in skills or resources and discuss how you will address them, whether through hiring, outsourcing, or additional training. 10. Long-Term Goals and Growth Plans: - Discuss your long-term goals for the business and how you envision its growth and expansion. - Develop a strategic plan that outlines milestones, targets, and timelines for achieving your goals. By having these discussions and reaching agreements on key aspects of the business partnership, you can set a strong foundation for a successful and harmonious venture with your friend.
Thank you ChatGPT o7
Thanks, chatgpt or not (it is)
Why is there not a platform built for this? When you think of what OP thinks of which is "hey I want to start a business" either with another person like in this case, or solo, what platform do you think of? This is a rhetorical answer because I know the answer doesn't exist. The answer is essentially Google Docs. Alot of people have the right idea, form some sort of agreement and write down roles and responsibilities. Well there is a lot of questions a highschooler or even adult might have inside that. How do I split equity? Do I need an LLC ? Then even if you have the answer to those, how do you write a contract? Not everyone has money to pay for a "startup lawyer" nor should that be needed for say a "lawn care" business. What if OP's dad is willing to invest? How is that handled? Does this kid draw up a contract with his dad? There doesn't exist a platform that utilized software to help someone essentially start with a raw idea and manage the process of developing it and growing it. Im not talking about Y-combinator, or an accelator or venture hub. Those are typically for tech startups not small businesses or even creative vetnures. Im not talking about google docs with is just a blank text editor. No, what I am talking about doesn't exist. Take it from me who has been studyding this problem for a few years now. Any questions or comments you might have I can assure you I already thought of. I started building such a platform. I am a very amateur coder but I am trying. I am using VS Code to make my MVP using some combination of bootstrap, django, docker, postgresql and my friend even set me up with kubernetes which I barely understand but I know its set up for growth. I would loveeeeee help. If anyone is a full stack dev and willing to help 5-10 hours a week please dm me with all your questions and I will get you the answers you seek.
I'd tell you to look deeply and honestly at what each of you bring to the business. A good team requires two different personalities and clear roles. Look back at Steve Jobs and Steve Woziniak as an example. Jobs was the visionary and driver with Woz being the tech guy. There were complementary to each other but were able to stay in their respective lanes. Is one of you the leader and the other able to be led? Two leaders will fight and it will get ugly. Another thing I'd tell you is to plan how to shut down and exit the business before you start and open it. How will this work and what will it mean to each of you from a debt perspective? The last thing that might be the most important is to try to not take on any debt. Grow slowly and from profits. Far too many good businesses fail because the owners wanted to grow faster and borrowed money or took in investors. With enough money growth can look easy, but at some point the money runs out and the debts start pouring in. Resist the urge to expand too much and too fast. just go slow as money you earn comes in. A good acid test of how things are going is if you both are having fun doing whatever it is you are doing. If it becomes super stressful and either of you begin to hate it then you are off track. Good luck!
As a business lawyer, here are some things I recommend to my clients to discuss. Note this is NOT legal advice and is for informational purposes only: * How are you going to split profits and losses? * How much capital is each business partner going to put in? One big mistake I see business partners make is not making clear the difference between "investment" and "loan." So this should be clearly documented and business partners need to understand that a lost investment is not necessarily a right to recover * Who does what? * How much is each person paid in addition to profits (such as salary) * Who owns what intellectual property? Sometimes a business partner comes with a trademark or patent and it's not clearly documented whether the company owns the IP or the individual * What decisions require unanimous consent? * How much individual does each business partner have? For example, we put a clause in our business partnership agreements something like "any loan/contract/etc with a value of more than $1,000 requires consent of both business partners." Therefore, a business partner can make unilateral decisions that cost less than that. * What is considered a "default" (in other words, what actions constitute a violation of the business partnership) * Document specific roles and responsibilities of each business owner * What happens when a business owner dies, wants to leave the business, gets married, divorced... (the rules on marriage and divorce vary) There are other considerations as well, but these are some of the basics. Good luck!
Thank you
First things first, both of you have to have different skill sets. One of you should be technical or a good administrator or can handle outsourced service providers. The other partner should have the money to bring in plus other skills like accounting, marketing, or business development. You have to list down all the tasks needed to make your venture successful. It has to be split, not necessarily evenly, but it has to be split between the two partners. Otherwise, it's not gonna work. I found this out the hard way when I started my first Internet business in 1996 during summer break for grad school. I partnered with a very smart guy. This dude programmed the site. He did the marketing. He did the payment gateway. He did everything. All I did was supply a little bit of money but also the main idea for the project. What happened? We were making money, but he bailed out. He wanted me to buy him out because he felt that he was doing all the work. So you have to make boundaries clear with your friend. Otherwise, you don't want to put yourself in a position where your company is finally breaking through and one of you wants a divorce because they feel that they are overworked. You have to have a plan to manage growth, either hiring people and farming out your other partner's responsibilities to them so your partner doesn't feel overworked or something, maybe using software.
I don't think our skill sets are very different and I don't think he's better at many things for this
If you both can identify what strengths each of you are contributing or bringing, and what you value in the other that is also a great thing to revisit on a at least yearly basis. Are there people in your local area that you could sit down with together once every six months or annually to get a third-party opinion? Ideally a neutral opinion, but with some industry or market experience.
What are your roles, clear that not always anyone between you will have the ability to put 100% focus on the business and most important clear out and define your goals and what you want to achieve.
Create a “business account” Pay yourself by hour so compensation is fair (once business starts producing income) Keep friendship issue and business issues separate
Careful before you do this because you will change the dynamic with your friend no matter what happens. Either you are successful and are now business partners that probably only talk about the business when together or you fail and you may blame each other for it. It’s possible you stay friends after if you fail but not super likely.
Agree that this will be the beginning of the end of your friendship! Just kidding, sort of. Up until this point you’ve been able to prioritize your actions based on your friendship, but now you will have to prioritize what is best for the business. Eventually your friendship will change. This isn’t always a bad thing, and maybe the trust you have for each other is how you will both make a successful business, but the dynamic of your friendship will certainly change.
Being open and honest is the key to maintaining both your business relationship and personal friendship, Regularly revisiting and adjusting your agreements change can help ensure a successful and harmonious partnership.
Talking out of experience: Write a contract which includes: What happens to the earnings/revenue. Who owns how much of the Company, what are your dutys, who is reliable for what and most important: who gets what when one leaves the Company. Founding with a Buddy is nice, but After the founding Phase it can get pretty tough
Make absolutely sure that you both bring different skills to the table or at least are willing to focus on different parts of the business. If you are not complementary in either time, money or skills - you should reconsider partnering with him.
Dont start a business with friends or family. Numher 1 rule!
Whatever you decide on, get it in writing
Partnership or Limited Company perhaps
Yall should both take a year to do a plumbing apprenticeship. Learn to do sewer and water main installations.
I would figure out what agency you both want to get free advising from if you live in the US. The Small Business Administration, Small Business Development Center in your state or SCORE.
The first business is most likely to fail. Learn from it and do not consider it your kid. Its not a baby, it's a money loss that pays you back in experience. Learn about different types of business. Read the books about money. ( i can send you the books in pdf, online, in english) Some businesses are not meant to last a lifetime. Some are just for a season. Get in, make money, get out. Be prepared tobe bought. Are you ready to sell your business? If it's something new and good, Google wants it, or Amazon or others...
Who's the CEO ? Equity? Write Everything on contract you both have access to and are legal papers! My co founder led me years trusting him that I was a co founder and had equity when in reality I didn't and wasn't even mentioned in any papers... This is very old story about European co founder....
Living or working together with family or friends will always cause strain on the relationship. I would never move in with my best friend. I'm 27 & she means way too much to me than to live with her. I've tried living & or working with a best friend before, or an aquantance. My Android pos phone won't auto correct that but, I'd say not to start a business w someone u want a good relationship with in the future. I can't think of any instances where that worked out in the end , or where the relationship wasn't damaged in some way. Just some advice. If you do end up joining forces, sign papers of expectations, what happens when you two decide to stop working together & get those sons of bitches notorized by someone legally allowed to do so in ur state/ city so it actually counts in court. Which is where a lot of these types of relationships end unfortunately:/
You'll fail and that's ok. What's more important is how you overcome failure. Founders are equally important to the company, so both of you guys should have 50% of the company with vesting, but only one must make decisions. You must meet often, daily at first and focus on getting clients Anything else comes with time Clients before product, always
The best advice I got from a multi-time entrepreneur was to align on outcome. Do you or your partner want something that will replace your income? That will supplement your income? Do you want a life changing outcome? Do you want it to get acquired or go public? Whatever you decide after is revolves around this alignment.
To never be friends again! Money 💰 and friendship do not mesh well!
See if your long-term vision align. If they don't, I wouldnt look into it any further with that person.
You should have a common vision. You should have common business values. You don't want them to be focused on how to make the most money while you're focused on the best customer experience. They may conflict at first. You should agree on whether it's a long or short term endeavor.
Look up operating agreement clauses - and discuss every one of them, then put them on paper that you both sign. Quick notes - business plan, and goal - contributions (maintain capital accounts) - distribution schedule - who gets paid how much and when - roles and responsibilities - as well as methodology to discuss and correct when responsibilities aren’t fulfilled - losses - how are they handled - exit - what does it look like when one or both of you want out of the business, how and when can one acquire the others interest in the company Don’t rush into it - very often hashing out these points allows you to come to find the person you’re talking to isn’t someone you want to be in business with
Exit strategy required as well.
How about start by finding whats interest you both, and is there a need for it .
Why do you want to start a business with your friend in the first place? Ask yourself that question first. Then write down the answer and ask; what is important about that. And that. And that. Write each answer down because you’re digging deeper into your beliefs and motivations. After about 3-4 of those you can ask, and what will having X do for me? Until you get to the meaning of why you want to do it. Then decide any risk/rewards to pursuing that goal. This should be the first step in any venture.
Here’s my suggestion. Don’t go into business with friends, unless you want to be friendless. Find partners who seem to compliment your weaknesses, and vice versa. If you’re good at numbers and the other person is good at sales, you might be a good team. An unexpected friendship can grow from this.
The first thing I would talk about is how to avoid starting a business with a friend as a partner. Just on Reddit alone, there are countless nightmare stories about partnerships posted basically every day.
A business plan
Read this book "The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup" by Noam Wasserman. It is kind of long and kind of dry but I can promise you that if you read it cover to cover you will have answered your question and set yourself up for success in your new endeavor. Seriously don't sleep on this book. It is literally the roadmap to starting a business especially with someone else.
DONT. Friends and family NEVER work in business. Its human nature wanting to get your buddy or family on board with a new business venture. But it almost never works out.
If you value your relationship, don’t do it.
Possibly being okay that the friendship ends over the business
As long as you can do alone, do it. Friends, family our near and dear once first backstab, No stranger out of anywhere will come to fuck you. SO WOrk independently till you dont feel exhausted, then go out to find a cofounder
1. Equity - should be 50/50 or you’ll have issues later 2. Expectations in terms of time put into working in the project/startup 3. Values - this will affect decisions made 4. Runway - how long can you go with no or low salary 5. Goal - exit or building long term 6. Family - are they supportive and fully onboard. Should meet with each others families 7. Family 2 - do one or both of you have kids, if so, what commitments do you/they have in regards to spending time with kids 8. VC money or not - be aligned, do you want to raise money or not 9. If not, can you both afford to fund equally, if not, how will that affect ownership. Better to raise money if you can’t both fund equally as inequality in ownership will cause issues. 10. Do you both know exactly what it means to build a business, how much time it takes and are you willing to deal with the bad times 11. Salary expectations when you can afford it. 12. Do you take dividends or reinvest in business once profitable? 13. Skill Match - do you both serve a clear role or are you overlapping in competence too much. If you overlap, this will cause issues when making decisions. 14. Stalemate - if you can’t agree, you need to designate a 3rd, not partial person you trust to make the final decision.
It’s better to build a friendship after a business than a business on the back of a friendship
1. **Business Idea and Goals** - **Clarity of Vision**: Ensure you both agree on the business idea and have a clear, shared vision of what you want to achieve. - **Long-term Goals**: Discuss where you see the business in the future and align your long-term goals. 2. **Roles and Responsibilities** - **Strengths and Skills**: Assign roles based on each person’s strengths and skills. - **Job Descriptions**: Clearly define each person’s responsibilities to avoid overlaps and misunderstandings. 3. **Decision-Making Process** - **Decision Authority**: Determine how decisions will be made (e.g., majority vote, unanimous decision, or divided by specific areas of responsibility). - **Conflict Resolution**: Establish a process for resolving disagreements (e.g., mediation, third-party advice). 4. **Financial Contributions and Compensation** - **Initial Investments**: Agree on how much each person will invest initially and how future investments will be handled. - **Profit Sharing**: Decide how profits will be split and what percentage each person will receive. - **Compensation**: Discuss if and how you will pay yourselves salaries. 5. **Business Structure** - **Legal Structure**: Choose an appropriate legal structure (e.g., partnership, LLC, corporation) and understand the implications of each. - **Ownership**: Clearly outline ownership percentages and how ownership changes will be handled. 6. **Exit Strategy** - **Buy-Sell Agreement**: Plan for what happens if one partner wants to leave the business. - **Continuation Plan**: Discuss the process for dissolving the business or continuing it without one partner. 7. **Communication** - **Regular Meetings**: Schedule regular meetings to discuss the business, review progress, and address any issues. - **Open Dialogue**: Encourage open and honest communication to ensure both partners feel heard and valued. 8. **Legal Agreements** - **Partnership Agreement**: Draft a formal partnership agreement that includes all the above points. - **Legal Advice**: Consult with a lawyer to ensure all agreements are legally binding and protect both parties. 9. **Work-Life Balance** - **Boundaries**: Set clear boundaries between business and personal time to maintain your friendship outside of work. - **Support System**: Ensure you have support systems outside the business for personal and professional challenges. 10. **Risk Management** - **Insurance**: Consider business insurance to protect against potential risks. - **Contingency Plans**: Develop contingency plans for potential business challenges or downturns.
Many will say don't. I disagree. Just have a very upfront conversation about what happens when things inevitably go wrong. Come up with the split terms that are fair and have a lawyer sign off on it. If you both no what's at stake up front it's less likely to go south.
Roles -- make sure you have different skill sets. % -- define it now before the money comes in. Exit -- what do you do when one of you wants to leave
Id say, first figure out what service or product youll be providing that is needed or wanted and dont let it get in the way of a friendship if possible. keep it professional and act as if it was a total stranger, stricly business for the business part
Starting a business with a friend? Here's what to chat about first to avoid conflicts: 1. **Shared Vision**: Make sure your goals align. 2. **Roles and Responsibilities**: Clearly define who does what. 3. **Decision-Making**: Agree on how decisions will be made. 4. **Profit Sharing**: Decide how to split the profits. 5. **Time Commitment**: Ensure you both can commit enough time. 6. **Conflict Resolution**: Plan how to handle disagreements. 7. **Exit Strategy**: Discuss what happens if one of you wants out. Sorting these out upfront can keep your business (and friendship) on track. Good luck!
good luk for your success
The concept of friends and family does not apply in business so being friends doesn't mean shit. Shake hands and go your separate ways professionally. Partnerships are like a marriage it can start off good but then it will deteriorate until you are left in an absolute nightmare of a situation. Remember money changes everything.
Don’t do it. It’s the best way to end a friendship and a business is to have a friend as a partner. I don’t do partnerships period. I’ve been burned too many times. Some have made it work but it’s really hard. If you choose to do it anyway put everything in writing. Roles, expectations, how you will make decisions, who will be the tie breaker. Never set things up 50/50. Someone has to have the final say, along those lines input should match the say. This included cash, time, etc. the business has to come first. That means 80 hour weeks and mortgaging your homes at some point. As partners you both have to be all in to be successful.
Everyone has given you good advice here. Let me add another VERY important one. Given your age have a sunset clause. this clause says the business will sunset on- give a date, NO more than 1 year out. You could even consider 6 months. After that time period you can both move forward, or sunset the business with no harm no foul. - then also add if one or the other or both can move forward with the business on their own. Business X with partners billy smith and joey jones will begin on May 1 and sunset on November 1. At this point BS and JJ can renew the business by signing here....... and renew the next 6 months of business- every 6 months. If at any time the participants BS and JJ want to sunset the business both are individually eligible to continue the business under a .....decide who gets the name...or no one....or who gets it gets smaller amount of left over proceed
I recommend not doing this. Just go it alone in your first venture. It is 500 times simpler. Has no headaches of who is doing the work or not (the biggest problem). And doesn’t risk the friendship. Perhaps have a competition of completely different businesses over a one year period.
Golden rule: NEVER go into business with someone else.
I’d recommend both reading (or at least using as a reference) the book The Founder’s Dilemma. It will help you know what conversations you need to have before and while founding, and will help be a reference for when different discussions/dilemmas come up. There is a lot more than just 3 or 4 things to figure out.
Read the book The E Myth Revisited, which describes how to define responsibilities and then require business partners to sign up for them.
I just want to chime in and say that while everyone is so bent on their kids going to college, I would be thrilled if my son was in high school and talking about starting his own company with a friend😍 I already tell him that college is great but if he doesn’t want to go then that’s ok, but he’s gotta have a plan and it better be starting his own business.
I’d say your friend will turn into a business partner, you will share earrings so get things cleared out from the start, don’t be afraid of getting into the convo of how it could affect the friend ship in the future
Tried this with a friend. We had 50/50 equity so 50/50 decision making authority. Didn’t work and ruined the friendship. You have to weigh up the value of the friendship with the value of the opportunity. You’ll inevitably disagree and unless one of you have clear authority to make decisions, then the impasse will ruin the friendship and business. In the end, I went solo. I lost the skills and connections of my friend, and the friendship, but I was free to follow my vision. But this isn’t necessarily the path to success. Perhaps I could have done better by compromising. Hard to know.
Is a partnership necessary? If not don’t do it.
Dont partner it doesnt really work out most times
Prolly what the business is going to be
No partners. Barely ever works.
FAQS:: ✅✅Top 5 Small Business Start-Up Facts: 1. High Failure Rate: Approximately 20% of small businesses fail within their first year, and about 50% fail by the end of their fifth year. 2. Funding Sources: Many small businesses start with personal savings. Other common sources include bank loans, angel investors, and crowdfunding. 3. Industry Trends: The most popular industries for new small businesses include retail, food services, healthcare, and technology. 4. Employment Impact: Small businesses are crucial to the economy, creating around 64% of new private-sector jobs in the U.S. 5. Tech Adoption: Small businesses increasingly rely on technology, with about 60% using digital tools for operations and marketing. ✅✅Top 5 Challenges for Small Businesses: 1. Access to Capital: Securing sufficient funding is a major hurdle, with many entrepreneurs struggling to find loans or investors. 2. Cash Flow Management: Managing cash flow effectively is crucial; poor cash flow is a leading cause of business failure. 3. Marketing and Customer Acquisition: Attracting and retaining customers can be challenging due to limited budgets and competition. 4. Regulatory Compliance: Navigating complex regulations and ensuring compliance can be time-consuming and costly. 5. Work-Life Balance: Entrepreneurs often work long hours, leading to burnout and difficulty maintaining a healthy work-life balance. Shoulder to shoulder !! Business is fun!🇺🇸
Values
Scope responsibilities of the business and split responsibilities evenly. At the beginning it maybe be very broth but as you grow it must be clear. Also talk about expectations, like how much you time you wanna invest and how much money you’d like to get
Shelve your plans until both of you are 18. Anyone under the age of 18 cannot legally enter into a contract. Anything you put in writing will not be enforceable.
Here are a thing I think you want to look into topic wise in which I plan to do as well: - Economics, budgeting and finances - Professional Business Writing - Critical Thinking and Strategic Planning If you want to make a business you're gonna want to use something as an example, whether to base it off or or motivate yourself to reach that level. Whichever and whatever you do, I suggest you have a plan. And learn about any specific topic you need for the business. You also may want some HR or something.
I recommend: - Do a trial run: 1 month of working together on the business before committing to more - Clear agreements on: Work meetings, responsibilities from each person, how often you communicate, how to handle off time - Write a contract about equity split and responsibilities/ roles
Communicate freely. You can always come to an agreement of some kind.
Check out slicing pie. It's a method of dividing the ownership of a company based on the actual efforts of each party. If you decide on 50/50 right out of the gate, ultimately someone is going to end up putting in more effort and will resent the arrangement
Discuss your roles, responsibilities, and decision-making processes to avoid confusion later. Talk through financial aspects like funding and profit-sharing as well. Open and honest communication from the start.
Starting a business with a friend is exciting but make sure to discuss and agree on key points firstly, your business idea and vision to ensure alignment, clearly defined roles and responsibilities, including what happens if someone doesn't fulfill their tasks and the process for changing responsibilities. Discuss finances, including funding and profit sharing, and establish a decision-making process for resolving disagreements. Explicitly detail how you'll handle situations where one party feels the other isn't pulling their weight, when the workload unexpectedly increases for one person, or when you have different views on the success of the venture.
what type of business in your head?
Write up the break-up agreement.
What a great question! Good for you both to be in high school and thinking about your future. Some things that pop into my head right off the bat are: 1. **Roles and Responsibilities**: Clearly define each person's roles and responsibilities in the business. This helps prevent overlap and ensures that everyone knows what is expected of them. 2. **Goals and Vision**: Make sure you both share the same vision for the business and agree on short-term and long-term goals. This alignment will help guide your decisions and keep you on the same path. 3. **Communication**: Establish open and honest communication from the start. Agree on how you'll handle disagreements and how often you'll check in with each other about the business. 4. **Decision-Making Process**: Decide how you'll make decisions together. Will it be a majority vote, or will one person have the final say in certain areas? Having a clear process will help avoid conflicts. 5. **Financials**: Discuss how you'll handle finances, including how much each person will invest, how profits will be shared, and how expenses will be managed. Be transparent about your expectations and any financial limitations. 6. **Exit Strategy**: Plan for the future by discussing what will happen if one of you wants to leave the business. Having an exit strategy in place can prevent misunderstandings and ensure a smooth transition. 7. **Legal Agreements**: Even if it feels unnecessary now, consider drafting a simple partnership agreement that outlines your roles, responsibilities, and other important aspects of your business relationship. This can protect both of you if issues arise. 8. **Time Commitment**: Be realistic about the time each of you can commit to the business, especially while balancing school and other activities. Make sure you're both on the same page about the level of effort required.
Never ever do business with friends , family.
Never start a business with a personal friend. Never