65% of startups fail because of co-founder issues.

If you’re starting a side hustle or startup with a friend, awesome! It is much harder to build something alone.

BUT here’s what you absolutely need to do to avoid falling into the 65% of business partners that breakup.

When people say a business partnership is like a marriage they’re not exaggerating.

And the most important part of any relationship? Communication.

Having advised hundreds of founding teams this is by far the most frequent reason for founder issues - lack of communication.

If you’re entering into a partnership here’s what you need to discuss in the FIRST FEW MONTHS of your work together.

Not 6 months later. Not when you have something that’s starting to work. As soon as you possible can.

1️⃣ Decide who will be CEO.

This is by far the most important question. For some it’s an easy decision (most people don’t want to be CEO). For others it can mean the end of the partnership.

Businesses aren’t democracies. If every founder has equal decision making rights nothing will ever get done.

Even if you split the company equally in terms of ownership you must decide who the defacto leader is. Who will be the tie breaker when there are disagreements.

2️⃣ Decide the type of business and outcome you hope to create.

Some founders swing for the fences. Unicorn or nothing. Growth at all cost. These businesses are the riskiest to build.

Others want a lifestyle business. A profitable business that creates a comfortable life for its founders.

Others yet want a quick exit. Build value and sell the business for a modest yet potentially life changing amount.

There’s no wrong choice here. But you have to make sure you’re alined to this right away as it’ll set the stage for many of the important decisions you’ll make.

3️⃣ Decide each partner’s contribution to the team ahead of time. What are your respective responsibilities?

This is important. Get this down on paper as part of your Founder Agreement.

Responsibilities can and often do change. Sometimes a founder starts as the CEO but then another one steps in.

Even if things change over time as you learn to work with your partner you want to have a starting point on paper.

4️⃣ Decide on the ownership split of the founding team.

Is one partner committing more time than the other? Does she have more industry contacts that can bring in initial revenue? Will she be investing personal capital?

All of this can have an impact on how the company is split up. 50/50 or 33/33/33 isn’t always the right move.

Yes it might be uncomfortable to have these conversations. And in some cases it may end the partnership before it got started.

But that’s kind of the whole point.

Your partnership needs to be able to withstand difficult conversations.

And learning how to communicate expectations is the best way to ensure a long lasting partnership where all sides can create success together.