As an entrepreneur or independent professional, you like being in the driver’s seat. But the road to success can be bumpy without a navigator—somebody who’s been there, made the mistakes, learned the lessons, and can give advice.
You may need a business partner.
A partnership is a flexible legal structure for a business. A formal partnership agreement covers how the business will operate, how earnings will be distributed, how conflicts will be settled, and how the partnership might close. Obviously, a formal business partner should be someone you trust, someone you can work with.
So, what are the pros and cons of bringing in a business partner?
Pros of Bringing in a Business Partner
If you’re a highly collaborative, partner type of person, there are plenty of reasons to go the partner route.
The Extra Pair of Hands
With a business partner, you no longer have to do everything yourself. You have someone to share the responsibilities and work along with the risks and expenses.
You and your partner can supplement each other’s skills and play to each other’s strengths. And you’ll have the advantage of mutual support and motivation.
Two Heads Are Better Than One
Two or more people who trust each other can brainstorm ideas and combine their talents and skills. Diverse opinions can lead to more creativity. Hammering out decisions together and working through the process of finding common ground can lead to better decisions and stronger positions.
Shared Financial Burden
With a partner, you can share start-up costs. Pooling your resources makes it easier to get the money to create your business. At a critical time in your business’s development, bringing in a partner can increase your odds of success.
Cons of Bringing in a Business Partner
Some aspects of a partnership may make you uncomfortable or give you pause. Consider the following concerns:
You Don’t Have Total Control
Aside from having to share control, consider this. If you and your partner disagree, it will be harder to make decisions. If you have different visions for your business you could end up having to dissolve the partnership, with one buying the other out.
You May Lose a Friend
A business partnership is a lot like a marriage. You have to get along for the long haul. If you disagree and the partnership collapses, your friendship may not survive.
You Split the Profits and the Liability
First, you have to split the profits. A big drawback to partnerships? Partners are liable for the profits of the partnership, which means you have to pay taxes on them. Losses and liabilities of the partnership are also the partners’ responsibility. That means that if your partner skips town, you will be personally stuck for your partner’s debts.
The Best of Both Worlds: Find a Mentor
Maybe you can’t find the kind of partner you need. Maybe you decide you’re not the partner type. Do you have to go it alone?
There’s another kind of partnership. Find a mentor. Mentor consultancy firm MicroMentor found in a survey of its clients that businesses with mentors were more likely to launch and had greater increases in revenue than businesses without a mentor.
A lot of what it takes to succeed in business is not taught. The only way to learn, other than by making expensive mistakes, is to ask somebody who’s learned real-world practices to share them with you.
Locate people you respect in your industry. Local connections and people you follow on social media who are successful in your business area are good prospects. Come up with a personal way to contact these folks.
Don’t ask to “pick their brain,” and don’t waste their time. Meet to ask what you want to know, and give them something in return, something you can give back with your expertise.
Finding a mentor can supply the pros of bringing in a partner and minimize the cons.
Design Your Own Partnership
Whether you decide to form a formal business partnership or to remain a solo entrepreneur, perhaps with the assistance of a mentor, is up to you. Starting a new business is more than a full-time job.
Among your many challenges is deciding what to do when the workload is too much for one person or when business needs exceed your own experience. Bringing in a partner or finding a mentor may be the best way to fuel your business’s success.