Pros: Shared start-up costs, responsibilities, risks and expenses. Complementary skills and additional contacts. Mutual support and motivation.<br/>Cons: You’ll have to share your profits. You won’t have total control over the business. It can be hard finding the right person to partner with.
What are business partnerships?
Going into partnership means starting a business with other people - sharing start-up costs, responsibilities, expenses, profits, and so on.
Why would I want to do that?
Entrepreneurs by their nature often prefer to go it alone, but if you want to share the load, or let somebody else take responsibility you don’t feel qualified to do yourself, then a partnership could be the perfect way to do this.
How do I find a good match?
It’s not easy finding somebody you can trust to work as hard as you, who shares your vision, and who you get along with. So take your time and be picky. Make sure you share certain values, motivation and work habits, as well as complementing each other’s skills. You’ll also want to ensure you can communicate effectively, as well as able to be brutally honest with one another. It’s worth checking their history, too.
Will this person be my employee?
No, far from it. As partners you are on an equal footing and will have an equal say in everything. You don’t have total control of the business, so you can’t force an opinion on your partner. Discussions and decisions have to be shared. In the beginning you should outline how the business should run, with clearly defined roles, so that you don’t step on each other’s toes.
How can I end a partnership?
Any partnership agreement should include exit clauses, probably with clauses which allow one partner to buy out the other’s interest. If neither partner wants to continue the business, you can liquidate and divide all assets. If there is a dispute, you may have to go down the legal route.