Should you have a business partner (or several)? As you start your new business, this will likely be a question you ponder at the beginning. There are many pros and cons to having a business partner and it’s absolutely critical you think beyond the first year. Consider:
- More manpower. You won’t be the sole person responsible for everything. You’ll be able to work less than you would if you didn’t have a business partner.
- Less risk. When you start a business with someone, you share the risk. If it fails, it’s not just all on you.
- More money. You likely won’t have to fork over as much to start your business since the start-up costs will be shared.
- Skills. Your business partner might bring some special skill set or knowledge that is important for your business – or that you can’t afford.
- Support. When you are up at 2am working like crazy and feeling like your business is a failure, your business partner will encourage you and sympathize with how you feel.
- Less money. When your business starts to show a profit you’ll make less. When you have a partner you may not be able to pay yourself as soon as you would without one – and when you do finally pay yourself, you won’t make as much because your partner is getting paid as well.
- Less power. You are not the sole decision maker. It won’t matter if you feel strongly about something if your partner doesn’t agree.
- Inequity. In many business partnerships someone does more work than the other person. This often leads to resentment because you are putting in more work, but not getting more money – or a bigger share of the business.
Deciding whether to start a business with a partner should be a long-term decision. I strongly feel that if you can start the business on your own and without a partner, you will be better off in the long-run. I say that from experience. I am friends with my business partner and have known her since high school – but friendships will be tested when owning a business, and for many, many reasons I wish I started them on my own. So, if you can do it solo I strongly encourage you to do that. However, if you simply aren’t going to be able to start a business without a partner – then it might be better to do it, because between having a business with a partner and having no business at all – it’s better to have one.
If you do decide to have a business partner, make sure you 1) Have a partnership agreement that spells out roles, responsibilities, selling the business, percent shares, etc and 2) Check in regularly to make sure equitable division of tasks.
Next, 30 days to Becoming an Entrepreneur: Promoting your business through social media
Photo Credit: Jo Christian Oterhals