Pros & Cons Of Having A Business Partner
Updated: Sep 3, 2020
Finding the right partner for your small business venture is essential for the success and growth of your business, so you will need to pick wisely. You must remember though, that even if you do have the right partner, it doesn’t necessarily mean it will be a smooth and a problem-free pursuit. However, it’s being able to deal with differences and problems effectively that will separate good partners from the bad ones.
Before getting into any kind of business partnership for your startup or business, you should be considering a lot many things. This link will help you with that.
Below are some of the Pros and Cons that one should consider before getting into any kind of partnership.
Pros of Business Partnership
Extra Set of Hands
Having an extra pair of hands will directly affect the rate of getting tasks done, managing the team more efficiently, keeping the roles and responsibilities sorted, and what not...
Two or more people will help you in getting the work done much faster and will help you make better decisions as now you don't have to worry about everything.
Another Perspective in Business Decisions
Should you improve your business proposition? Or open a new office in some other city to meet the demand for your clients? Should you improve marketing campaigns? Or you need to focus on hiring new talent for your business? These are some of the very normal decisions that a business owner has to make during any given quarter or year.
Having someone to share the burden will definitely help you in making a better and informed decision and to focus on other things as well.
A like-minded partner giving better suggestions or making valuable contributions with an objective to improve the business will give you a massive leg up.
Less Financial Burden
Setting up a business can be expensive. Things like office space, employee salary, inventory, etc. can ask for a lot of financial inventment.
Having a business partner can ease the financial burden. Instead of paying for everything yourself, you and your partner can split the cost. Because of the partner’s financial contributions, the business might be able to afford more things upfront.
More People... More Growth
Your partner is bound to come to the table with different skills and experience simply because they are not you. Having that diversity allows you to delegate tasks and focus on your talents and abilities.
Cons of Business Partnership
If you get along seamlessly with your future business partner, this isn’t an indicator that you will succeed; it’s more likely that you won’t. In every single business partnership, you are going to run into conflict, tension, and disagreement.
Business partnerships are far more similar to marriages where you need to be able to get into a fight and come out of it with the relationship intact and stronger because of it.
You’re taxed individually
Generally, business taxes have lower rates than individual taxes. Because the taxes are passed through to you and your partner(s), you might collectively pay more than if you paid business taxes.
Delay in Decision Making
The decision-making process is an obvious aspect that transforms with the addition of a new individual’s beliefs and opinions (especially large decisions). Compromise is crucial.
Sharing the Profit
When you run a business by yourself, you have an opportunity to gain all the profits from the business. But when you have a partnership, you have to share the profits. Depending on how many partners you have, your share of the profits can get fairly small.
Now since you have considered the pros and cons of having a business partnership, but it won't stop to make a dent in the universe. Here are a few things that you should always consider before getting into a business partnership with anyone.