Together, we could be a flop or we could be the strongest business partnership.
You know, sometimes, founders don’t see eye to eye on things. It could be because they don’t talk enough, or they start wanting different things for the business. It’s pretty common for people to have disagreements. But when those disagreements start to get in the way of the business doing well and growing, that’s when you’ve got a real issue.
My business partner and I had a disagreement, and now we’re parting ways. So, I want to share the lessons I’ve learned from this experience to help you avoid making the same mistakes I did. While I’m thankful for the time we spent building our business, it’s important to learn from our disagreements.
I’ve also included some YouTube videos on the same topic. Just scroll down to the bottom to find those videos.
I want to let you know that if you’ve already made these mistakes, don’t be too hard on yourself. Some people say that disagreements among founders are a rite of passage, so consider it a part of your learning journey. I’ll also share advice from another business owner and founder.
I made these mistakes so you won’t:
Mistake #1: Starting a business based on trust.
This often happens when new founders who haven’t had much experience in business team up. It was my first time starting a business with someone, and we went into it trusting each other. But you know, trust isn’t something that can’t be broken, and in our case, it was.
That’s why it’s so important that before business partners start working together, they should create a document called a “memorandum of understanding.” Everyone involved should read it, understand it, and sign it. This document lays out the business’s main goals and clearly explains what each partner is responsible for.
By doing this, there won’t be any confusion about who does what in the future. As you can see, not having this in place led to a bunch of other avoidable mistakes for us.
You can check Google for templates or better still, involve a lawyer from the get-go.
Mistake #2: Ignoring the red flags.
You know how we avoid people with red flags in romantic relationships? Well, I think we should do the same when building a business with someone.
Just because someone’s a great friend doesn’t mean they’ll be a good business partner. So, it’s important to carefully check out potential business partners before partnering up.
Start by making a list of what you want in a business partner or co-founder. Figure out which qualities you absolutely need and which ones you can be flexible about. And please, don’t partner up with someone just because they look good on social media. Sometimes, people who seem great online aren’t so good at working in a team.
Remember, you’re running a business, so think like a businessperson. Go out there and find top-notch people to work with, and don’t settle for anything less.
Shalom from Roomme on red flags:
Truth is, the signs are usually there at the beginning but we just overlook it and hope the person changes or we reach a consensus
Advice: Deal with it as early as possible else you’d spend energy meant for building to repair damages.
Mistake #3: Not having a bank account that is accessible and open to founding parties.
Because we trusted each other so much, money was paid into one person’s account. This might work in a marriage, but in business, it’s not ideal.
To prevent this mistake, a business should set up a dedicated bank account, and every founder should have their name on it as a signatory. This way, financial transactions are clear and transparent.
Shalom from Roomme said this is what works at their startup, but first a disclaimer:
I’d just say how we currently handle it, but, It may not work for everyone
So, we created a business account where we’re all signatories And it’s required that someone else approves a transaction if you initiate it. You can’t initiate and approve a transaction (because given the right opportunity, you sef fit flop).
Also, we have a Discord server where our team works remotely from. We have a private channel for co-founders where we discuss too and there’s a channel for “transaction receipts” where everyone who performs a transaction on behalf of the team is expected to deposit the receipts so it’s easy to monitor how funds are being used
P.S: We all discuss and agree before spending money.
I believe every new founder can learn one or two from the Roomme team.
Mistake #4: Not learning from other people’s mistakes.
New founders often believe they understand how their relationships with their fellow founders will work, but that’s not always true.
To solve this problem, you can do some research. Many startup founders share their experiences on podcasts. One podcast you should check out is Startup Stories with Cynthia E. Chisom. The title of the podcast gives you a good idea of what to expect.
Be a student of history and learn from the mistakes of those who started businesses before you. That way, you can avoid making the same mistakes they did.
Mistake #5: 3rd parties instead of lawyers
You’ve probably heard that in marriage, it’s not a good idea to involve third parties. Well, the same goes for business founders. It’s essential to realize that no one knows your business partner like you do (within the context of business). Your friends might offer advice, but it’s often based on their love for you. Sometimes, this can cause problems between you and your co-founder.
Founder disagreements happen, but bringing in third parties who aren’t neutral can be really harmful. That’s why it’s a smart move for founders to have lawyers, either as part of the business or on a personal level.
You need someone who can look at the issues without getting caught up in emotions, and that’s where Osita James Uche comes in. He helped my business partner and me find common ground, and I’m confident he can do the same for you.
Having a lawyer for your startup or business can help you avoid making costly mistakes that could harm your peace of mind and slow down your business’s growth.
Now, these are specially selected mistakes I know you can learn from. Feel free to share this with your entrepreneurial loved ones or anyone you believe needs to read this.
Until I write to you again, I'll leave you with my mother’s favourite quote.
When you put your mind on something, no jupiter on earth can stop you.
Having a business partner break up is not the end of the world. It is another step in the direction of greatness. Decide you will go ahead and do great things and watch the universe converge in your favour.
Check out the YouTube videos below. Enjoy.