Do not sign ANY financial documents or loan agreements unless and until you have a complete financial picture, tangible and philosophical, of each other and can make informed decisions. In some types of partnership designations, all partners are responsible for all debt, whether you are the 5% partner or the big boss.


As a business partnership consultant, this is the first thing I tell all my clients.

I advise that an unrelated third party—lawyer, accountant or CFO—review each partner’s financial statement, credit rating and any bankruptcy documents before those partners do anything financial together.

This means opening a bank account, getting a line of credit or business credit cards or spending even one dime together.


Financial differences rank high on the list of business partnership problems and why business partnerships fail.

And it’s not just because one might spend more than the other.

That’s too simple.

You need to dig deeper.


PROBLEM: You might be undercapitalized. 

PROBLEM: Neither of you has any skills around money management.

PROBLEM: You disagree on how to run the business.

PROBLEM: You have different money philosophies.


These are all financial philosophies, and the reasons behind them are critical to partnership decisions that lead to success or failure. Sure, sometimes out-and-out theft is the culprit. But in most cases, partners make well-intentioned but uninformed, unbalanced, fearful or naïve decisions that lead to disaster.


You must be intensely self-aware about your financial philosophy and then thoroughly and intensely get to know about your partner’s.

And just so you know, banks and creditors could care less about your business problems, partnership problems, broken heart, lost friend or depression. Creditors are Willy Sutton: they, too, go where the money is.

The best partnership consultants know this, and help you to ask the right questions and think deeply about what you are getting into.

Think about this: if your partner comes from a wheeler-dealer gambling mentality and is cool with it, that philosophy will touch every aspect of the partnership, including and especially, the financial area. Marry that with someone who comes from scarcity and is afraid to lose a dime and it isn’t going to matter how well the two of you get along—the partnership will have a fundamental flaw.

Neither perspective is right or wrong. They’re just different, and the divide will be too great to overcome.

You cannot beat what is ingrained so don’t even try.

Instead, open your eyes and see all that is before you.

If you don’t, the result is business partnership problems that poison the rest of the business.


Money issues will destroy even the best partnerships. So pay attention, ask good questions and please see an attorney to help you determine and master the legal partnership entity that will best serve you.


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