Meg Hourihan has some excellent advice for entrepreneurs going into business:
Starting a business with a partner (or partners) is very different than starting one alone. The closest analogy I can come up with is that it’s like marrying someone, and the business you build is your child. Now you’d never marry someone simply because they possess different skills than you do (she likes to cook, and I don’t mind cleaning up, so I guess we’re a match!). You marry someone who shares similar values and who shares similar goals. Choosing a business partner is a decision that should be undertaken with the gravity of any long-term commitment.
If you like to spend a lot of money and your partner doesn’t, you’re going to clash. If you want to grow the business and she wants to keep a small team, you’ll fight. Your partner may want to do something you consider morally questionable, how will you resolve it? Add to the partnership the questions of equity and authority, never mind cash flow and the actual work you have to do for clients, and pretty quickly you can find yourself in one heck of a mess. The more work you can do upfront before starting the business to ensure you and your partner(s) are a good match, the greater the likelihood of success. Spend a lot of time talking about your hopes and dreams for the company, and discuss what you’ll do when you don’t agree about something, and how you’d handle things if the money ran out.
I would add one more thing: when one decides on a business partnership, also talk about exit – if at a point of time in the future, one or more partners wanted to leave, how could they do so. This can save a lot of heartburn later.