Anyone who has started a business from scratch will know only too well the pitfalls that they can encounter. Many people choose to go it alone, but the old adage that ‘two heads are better than one’ has never been so apt. Indeed, statistics show that new businesses are more likely to succeed if they begin with two founders, but it is equally easy to get it wrong.
Choosing a co-founder is not something that should be taken lightly. You may already have a co-founder on board and have drawn up plans to launch, but even so you need to set down some ground rules in order that you do not make the same mistakes that many new business founders make. Let’s have a look at the five most common mistakes made by people looking to choose a co-founder.
Splitting the Commitment
In many cases a decision is made whereby one partner puts in the money and the other does the bulk of the work. This may work well at first but in time, as the business grows, the one doing the hard work will begin to feel they are getting the tough side of the deal. They will be right, too, for they are; time is harder to spare than money, after all. Make sure you agree a proper working partnership, with equal monetary and work commitment.
The Family Connection
A working relationship is fundamentally different to an emotional or family commitment. It is all too easy to start up a business with a spouse or sibling, but what happens if things go wrong? Families have been ruined by failed businesses, and it is easy to see how. It is particularly difficult when a married couple are the business partners as the stress of the problems is on both of you. Think very carefully before going into business with family.
The beautiful idea that joint decisions can carry a business is a fallacy. Quite simply, as with all walks of life someone has to have the final say. No matter how in touch you are with each other’s ideals there will always be something over which you disagree. Even the most trivial of disagreements can lead to major problems in the business. As a unanimous decision is not always going to be possible, somebody needs to be given the authority to carry the vote. Make sure this is clear from the outset or rocky roads lie ahead.
One of the major mistakes in choosing a co-founder is that whereby you deliberately go for someone who is similar in views and ideas to yourself. Think about it for a moment – what is the point? You already have your ideas, so why double up on them? What you need is somebody who complements your ideals and views, who understands them but brings a fresh approach that adds to the plan. This can be hard to achieve, but is a very important point indeed.
The Skill-set Overlap
Quite simply, two accountants starting a business is a bad idea; one accountant and one salesman, for example, is a good idea. If you already have one clear set of skills and experience why take on board a co-founder who has the same? You need to spread the available experience across the board, and make sure that while you tackle one aspect of the business your co-founder is working on the other. This is a common mistake made in business start ups, and one that is easy to avoid.
In choosing a co-founder you are making one of the most important decisions of your life. Both parties need to know exactly where they stand in relation to all aspects of the business, and what is expected of them in the long run. Your business relies on careful planning, and with many start-ups failing after a short time you need to consider this very important factor carefully.