I know, right now you’re thinking, “We don’t need to worry. We are best friends. We will figure it out as we go” - and I can absolutely assure you that if this is your idea, it WILL end terribly. So, instead, prevent future problems by answering these 40 questions (If you can easily answer these questions then you may sincerely have a good business partner! But if you can’t easily answer them, the time IS NOT NOW!)
1. How many months will you stay open if there is no money coming in?
2. During this time, who is affording the bills? (Also, how much are you expecting the bills to be and what if expenses are higher than planned?)
3. Regarding the above; what if the moneyless time lasts 12 months? 18 months? 24 months? Or longer? Does the agreement remain the same?
4. If the bills are split, how are they split? For example, a gas bill might be very low during the summer but very high during the winter.
5. Who is paying for inventory? And who is deciding on vendors, amount to be spent, when to order and how much to order?
6. How is markup going to be determined?
7. How much total do you plan to spend on this business without money coming in?
8. How are both parties going to afford to live if there is no income in addition to monies being paid out?
9. Regarding the above, what if the moneyless time lasts 12 months? 18 months? 24 months? Or longer? Does the arrangement remain the same?
10. What percentage of profit is reinvested into the company?
11. What is done with the remaining profit?
12. If someone has taken out loans, charged credit cards or borrowed against a 401k, do they get repaid with all profit until reimbursed in full? If not, what percentage of profit is remitted to them? Do they earn any form of interest on their investment?
13. IF the company NEVER becomes profitable and IF the company must close, what happens to the inventory?
14. What happens to the money charged on the credit card, the loan or the 401k?
15. What happens to any assets that are non-inventory (computers, fixtures, etc)
16. If the company has some form of legal trouble, who is shouldering this expense?
17. How many hours will both people work per week?
18. Are there set days off?
19. Are there any rules that absolutely cannot be broken?
20. Who will handle accounting?
21. Who will handle purchasing?
22. Who will handle marketing?
23. Customer service?
24. Photography / Photoshoots
27. General Work, such as physically restocking supplies onto shelves
28. What hours will be worked?
29. Is there any time off per year? If there is, how will this be structured?
30. Product Listing?
31. Will other investors be welcome? If so, what is the agreement?
33. If more capitol is needed, who is going to secure it and how?
34. If the company does become profitable and you are able to collect a pay check, what wage feels fair for both parties?
35. What is your 5 year plan with this company?
36. What is your 10 year plan?
37. Who will be paying business insurance? And, how much of an insurance policy do you plan to obtain?
38. Who is in charge of the website?
39. Who is in charge of SEO?
40. Who is in charge of the mailing list?
41. Who is in charge of making hiring / firing decisions?
42. Who is in charge of making sure bills are paid each month?
43. Who is in charge of coupons?
44. Monitoring website traffic?
45. Abandoned Carts?
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