The Pros and Cons of Building a Strategic Business Partners
Building a strategic business partnership could help you further your entrepreneurial goals, or it could hold you back from accomplishing them. The key is to establish a partnership with the right person, and that's not always easy to do. Sometimes you're better off on your own, but you'll need to examine the pros and cons of a partnership yourself before you can decide whether or not to get into one.
Possible Pros:
The potential pros of a business partnership are greater when you have a great partner who really suits your goals and potential. Here are some of the things you can gain by sharing in a strategic business partnership:
Sharing costs
With a business partnership, you get someone to share the costs of starting a business with you. This could mean that you have to take out fewer business loans to get started. It also means that you could get bigger business loans or higher limits on your small business credit cards because you'll be working from more capital to begin with.
Sharing responsibilities
A business partner means you can divide responsibilities with someone else. This can take out some of the time strain of starting a business, and it can also mean you don't have to be as much of a jack of all trades. If your business partner has different skills from your own, you can each do what you're best at, allowing you to be more efficient and hopefully put in fewer hours overall.
Sharing ideas
Sometimes you can get into an idea rut as a business owner, but a business partner gives you someone to bounce ideas off of – someone who is just as involved and invested in your business as you are. Sure, you can talk over new business ideas with your spouse, your mom, or your best friend, but unless they know your business as well as you do, you probably won't get as many great ideas out of them.
Sharing support
A huge plus to having a business partner is that you can support one another in your business and in your everyday lives. A business partner can take on some of the load if you have problems at home you need to deal with, or if you're just feeling burnt out. A business partner can also take on some of the business responsibilities you may not be good at, and you can do the same for your partner personally and professionally.
Possible Cons:
Even if you form the perfect business partnership, there are some risks and possible cons. Here are a few to consider:
Sharing risks
Not only do you share responsibilities with your business partner, but you also share financial risks with him. If your partner decides to take off without paying your business debts, then you're responsible for those debts. You can protect yourself legally from some financial problems, but you're still risking paying more than your fair share of business debts when you take on a partner.
Sharing profits
If your business takes off, you'll have to share profits with your business partner. Sometimes, you can get bigger profits because your business will grow faster, but sharing profits can be difficult for entrepreneurs who work hard to create their own businesses. This is especially true if your business partner has less of a work ethic than you. You could get stuck splitting the money even Steven even when you don't split the hours evenly.
Sharing control
This can be one of the most difficult parts of a business partnership. If you're the type of person to start your own business, you probably enjoy calling the shots when it comes to your business ideas. With a partner, you'll have to take someone else's opinions into account, and you'll probably end up compromising pretty often!
It's not for anyone else to tell you whether you should or should not take on a business partner, but you should certainly carefully consider the pros and cons of doing so before you decide to take on a partner. Also, you should make sure you use extreme care in choosing your partner – as much care as you would take in choosing a spouse – since the partner you choose has the potential to affect the success of your business and the rest of your life.
About the Author: Daniela Baker is a small business blogger at CreditDonkey, where she helps hard working entrepreneurs with her no-fluff tips and infographics.
