When you’re in the planning stages of starting a business, one huge question is whether you should be a solo entrepreneur or find a suitable partner to join you in the business. There are pros and cons for each type of business structure. In my previous post, Do This Before Starting a Business Partnership, I noted important things to consider before choosing to be in business with a friend and/or family members. It is also possible to become a business partner with a casual acquaintance or even someone you just met. Due diligence, no matter how well you know the person, is essential when making this important decision. You don’t want any surprises down the road that could ruin your reputation or the reputation of your business.
When starting a business, there are pros and cons to consider when choosing a partnership.
Benefits of having a business partner
As an entrepreneur, it is all on you. Having someone to share the burdens as well as the successes can be a great thing. Some key benefits are:
- No one is exceptional in all aspects of the business world, so finding a partner with different or complimenting skills can be a huge boost to your buisness.
- You will have someone to talk to that understands your hurdles and disappointments.
- You won’t have the full burden of the financials, lessening your initial investment as well as the ongoing startup and ongoing expenses.
- You most likely won’t have all the same contacts, so there is a possibility of immediately having double the contacts for prospective clients.
- When you are ill or experiencing a rough personal issue, you will have someone to pick up load.
- Even in the early stages of the business, it’s important to take time off for a break from the long hours and total focus on the business. A partner will be able to keep the efforts moving forward while you take turns with a few days off for some much-needed rest and relaxation.
Things to consider before choosing to enter into a business partnership
On the flip side, there are also issues to consider when you’re sharing a business:
- You will be giving up full and total control.
- You will have to consider a give-and-take when it comes to making major decisions.
- Though your partner will share in the investment, that also means that you’ll have to share the profits.
- Sharing the profits means a need to grow the business faster and larger so you can support two families.
- If your partner’s quality of work suffers, it will reflect on you and your business as well.
- If your partner chooses to walk away, you will be saddled with any business debts.
If you and your partner have the same values, level of energy, motivation, and goals, this could be a sign of a successful partnership. Be sure you are in sync with these areas, and make sure that you do that one thing before deciding on a partnership, as mentioned in my post mentioned above. A failed business partnership can easily ruin a great friendship and could also tear a family apart. Proper planning will hopefully prevent that from happening.