There are no guarantees to success in business, even when undertaking a partnership with another person that has demonstrated success. However, there are some advantages in having a partner. Partnerships work when there is equal investment and exposure to risk, and equal effort. There are some endeavors that simply cannot be accomplished with a sole proprietorship, and having a partner can make a big difference when times get lean. Some partnerships are doomed to fail from day one because they are poorly matched or the partners have different goals. Also, things in the business landscape change quickly and it is good to have a partner that can grow with you, and in the same direction.
“Working with a business partner drastically changes the dynamics of running a business. A great business partner can add a lot to a venture. On the other hand, entrepreneurs can also benefit from going solo when the alternative means an incompatible partnership or working with a partner who doesn’t have the right skill set or experiences necessary for success.”
Having a business partner has advantages and disadvantages and I’ll talk about some of those today.
One of the biggest benefits of a partnership is having someone to share the responsibility of running your business. When you work with a partner you can do twice as much. There is another person there to pick up the slack should you be called away by something in your personal life. You might not have the financial backing to hire employees so having a partner can be helpful.
In some instances, there is also less pressure and responsibility. Having a partner doesn’t mean you’ll do less work necessarily but you have someone there to share all the challenges of starting up a new venture – bookkeeping, networking, sales, marketing, research and development, securing funding.
A partner may also bring new skills to the table. Two minds are often better than one. You might have different outlooks and perspectives on how your business should be run. Remember, no one knows everything. When you have a partner, you can bounce ideas off each other. You can also brainstorm together and come up with potentially more innovative ideas on how to grow, succeed and sell your product.
Partnership also gives you balance; the right push and pull. One partner might be more reserved and cerebral whereas the other might be more social or an active go-getter. It puts a system of checks and balance in place.
A business partner can also hold you accountable. “Some people become lackadaisical when they begin a business. They may have a hard time maintaining the discipline needed to stay motivated. Partners keep each other on the ball, and hold each other accountable for any mistakes.”
A partner can also help you keep things in perspective and stay realistic about the obstacles you may face when first starting up. Partners can help keep each other positive about where the business is heading. Sometimes you might find yourself getting down as you face challenges in the marketplace. A partner is there as your reality check.
There are also financial benefits to having a business partner. If you are trying to start your own business, it can be difficult to deal with all of the financial aspects that are included. You have to worry about the start up costs, the maintenance, and any other costs that are included all on your own. This is one of the main reasons that so many individual business owners give up, since they run out of funds to make the business grow.
While there are many advantages to partnerships, there are also disadvantages.
Often business partners can grow apart and deviate from the original concept for the business. One person might want to branch out or take the company in a different direction. Additionally, a partner can get lazy, leaving all the responsibility on your plate. Many entrepreneurs find themselves working with partners who don’t share their enthusiasm or passion for business. “Partners who can’t meet deadlines, follow up with clients, or follow through with their responsibilities can bankrupt an established business or a new business venture.”
There could also be an inability to make financial decisions together. As the business grows, there will be various financial decisions that will need to be made. It is very rare for an agreement to occur between both parties when there are issues dealing with money. “Often, a third party has to be brought in to help resolve the issues. It is best if both people make a finalized agreement prior to starting their business arrangement to avoid having any financial misunderstandings.”
Some people are often stubborn and find it difficult to compromise. The question of who is really in charge can arise. Is one person becoming more powerful in the decision-making process? These are issues that need to be dealt with at the start of any new venture. Outline the responsibilities both partners will take on so there are no misunderstandings down the road.
“Business partners may disagree on the long-term goals for the company. They may spend weeks or months bickering over key decisions. Disagreements between partners may consume resources, cause stress to other employees or lead to inconsistent business practices.”
Additionally, you are liable for your partner’s actions. If your partner violates any laws, you will be held accountable too. This can lead to fines or even a day in court or possible imprisonment in the event your partner commits a criminal act. Don’t forget: your reputation is on the line in business so you have to make sure you and your partner are both committed to keeping all practices above board.
As I’ve said, taking on a business partner has its advantages and disadvantages. There is someone there to help you reach your goals or work with when times get tough but there are also liabilities or disagreements that can arise. Think long and hard before deciding on whether partnership is right for you. It might be wise to begin as a sole proprietor and then look to take on a partner as your business grows.
Check out this article on just how to find the perfect business partner: http://www.inc.com/guides/leadership_strat/23041.html. It just might help you make the right decision.
Here’s a “Beginner’s Guide to Finding the Right Business Partner”: http://www.quicksprout.com/2009/11/04/finding-the-right-business-partner/.
“Steps to Finding the Right Business Partner”: http://www.wikihow.com/Find-the-Right-Business-Partner
“Finding the Right Business Partner is Harder than Finding the Right Spouse”: http://myventurepad.com/MVP/92391
Until next time…
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