Deciding on partnering with a relative or friend on a business venture means building the brand from the ground up. That entails sharing dreams and responsibilities, including managing your finances and working towards your financial goals. It is crucial that before jumping into this new status in life, business partners need to write down their plans on how they will go about managing their shared responsibilities.

Dissolution of ventures stem from financial disagreementsAn Atlanta-based accountant advises business partners to “think with your brain and not only with your heart.” The adage “Prevention is better than cure” aptly describes such advise. He adds, “Take your time and don’t rush in making your decisions. Consider the worst-case scenario and what could go wrong. Feeling in love is so powerful that it makes you overlook important things when decision-making.”

Regardless of your financial status, managing finances ranks high among the reasons business partners break up. It is therefore essential to be clear about how you, as partners or associates, will manage your budget including your goals to minimize the devastation and tragic consequence that money matters may bring.

The sooner you realize the importance of such decisions regarding how you will manage your finances, the better it is for both of you. It is echoed by one Chicago-based accountant when she says, “Your relationships will be so much better and so is your romantic life at home.”

Every business partnership has to figure out for itself what will work out as the situations from partner to partner may vary. There are no hard rules but as you go about building your brand together, here are some helpful ideas:

1. Disclose your finances

Be open to talking to each other about financial matters, your income, savings, assets as well as your debt, your dues and obligations, and anything else that has to do with finance. However, you may choose not to tell all including any inheritance you may have received, or you might expect in the future. An accountant from Texas reminds business partners about specific reasons why it is not wise to divulge everything about money especially when you are just starting the brand with your partner. Once you have established trust, then you can start talking about this sensitive stuff.


“The more open and transparent you are with your business partner, the better chance that your relationship will have a smooth sail and headed for the long term,” says the senior vice president of a popular hedge fund company.

2. Share Your Space

Talk about the terms of lease or ownership of your home or any real estate property that you may want to put the business in if needed. Having your office in an owned property will save you and your partner tons of money. Discuss the amortization amount and schedule of payments and how each of you will split the expenses. Be fair in considering you and your business partner’s income and financial ability.

“As both your income and business relationship grow, regularly assess how much you are paying for things. Write down your names, and what you are paying for, so you know how much each of you contributes,” a hedge funder says.

Be transparent and fair as both of you talk about what you own or get and what your obligations are should your relationship end in the future. Of course, it is something that every business owner dreads to foresee.

3. Split the Bills

It pays to agree on splitting your expenses as business partners. It includes your rent, food, utilities, human resource payments, and all other items including coverage for unexpected events. Doing so will spare your business relationship the hassle of determining who should shoulder which expense when the problem arises.

Open a joint business account where both of you can make deposits for such expenses so it will be convenient where to get the funds later. Set time for assessing your financial situation at least four times a month so you can track your progress towards your shared goals.

Transparency in terms of debt will solidify partnership4. Keep debt separate

“Don’t commingle your debt,” advises a New York-based accountant. It is best to maintain your credit identity and history separate from your business partner. Your personal debt should not burden your partner or the other way around. Keep in mind that business debt is distinct from your personal debt, as determined by tempCFO’s outsourced services. If one of you is debt-free while the other is not, it will cause trouble later when you have joint ventures or shared responsibilities. “It will spell a lot of troubles in the future if you have joint goals or shared household expenses,” adds this accountant.

5. Put it in writing

Record everything in written form. Have a lawyer facilitate the agreement for the both of you. Such agreement lets you define the rules about how you’ll pool money to pay for your shared expenses including leases, recurring bills, and how you will divide ownership of assets.

“Nothing beats the security provided by some insurance should anything unfortunate happens. Your business relationship may end, but at least you have some of form of assurance,” says one Texas-based accountant.