Starting up with a friend
This is gold. Almost everyone new to entrepreneurship makes this mistake (not setting very clear expectations early on in a business), and it sucks. Here's the comment I left on the site:--Very wise advice from someone whose already been there. Three more questions to think about:1. Expenses: What is and is not an expense? Especially getting clear on business entertainment, business travel, "general life expenses that are also business expenses" like internet access, and so on. Also, what's the max dollar amount someone can spend on an expense without checking with the other person? My default advice is keep business expenses low and stick to the necessary. For a first company, say no to business entertainment, business travel, meals, general life expenses, and any hardware that a person would use for non-business reasons.2. Profit distribution: When and how will profits be distributed? How much will be reinvested? What will the reserves be? What if one partner wants or needs cash, and the other wants to put it into expanding? This is an important question, and potentially contentious. Especially if your business is growing and money is coming in, but founders are in different places financially. Especially a point of contention if one founder is heavy in unsecured debt, and the other isn't.3. Hours: When (not if) the hours you're working get unbalanced, how to handle that? Less an issue if it's both of your full time gigs and you're putting in full time effort each. Very important to think about if it's a side project or people have other obligations. The way I've seen work is that you define roles clearly to be completed on a plan to profitability, and once you're profitable, founders draw salary for regular, recurring work they do that's at market rates. If upkeep on the business after it's built successfully takes 15 hours/week, but lends itself to one founders skillset so he's doing 12 hours per week, you're going to have an issue really soon. Instead, that founder can get paid at around market rates, or you can outsource that part of his job.Those are three I've seen issues with - unclear expectations on hours, profit distribution, and expenses. You've obviously been there Daniel, very nicely written up mate.