You have a great idea for a business, but the idea of taking the entire challenge of your operation onto your shoulders. You’ve thought about taking on a business partner to help share the load.
Is that really a good idea? Here are some things to consider before you make that leap.
Any partnership is a compromise
The moment you take on a business partner, the company ceases to be your own. You can no longer close for the day on a whim because you want to go fishing. You can no longer snap up a property you pass on the spur of the moment. Everything you do from now on will require someone else’s approval, or at the very least, it requires you to bear their wishes in mind when making a decision.
Most business partnerships fail
Reports vary but suggest that between 50% and 80% of business partnerships fail. Here are some of the reasons:
- You have different visions: Your partner’s ideas for the company’s future may be similar to yours, but even slight variations can cause problems.
- You do not contribute equally: While you might sit in the office for the same number of hours or put in the same amount of capital, it is hard to be sure you are both giving the same.
- You step on each other’s toes: Unless you define your roles exceptionally well, there may be times you feel your partner oversteps the mark.
There have been some fantastic business partnerships, and there have been some incredibly successful solo entrepreneurs. If you do decide that two is better than one, a well-written partnership agreement is essential. It can reduce the chance of problems along the way and ease their resolution if they occur.