Your business is something you treat like a baby. It came to life because of you and because you looked after it throughout this time. It is a moment of pride for you every time you see it grow and prosper. You get the validation by sharing about its success with others. However, being an entrepreneur, it is human to be protective of it. The thought of sharing it with someone else or putting someone else in charge is frightening and threatening.
However, there comes a point in every business where you have to share it with someone else. It becomes essential to make someone a part of your business as vital as you for it to grow and prosper further. This situation occurs more frequently for solopreneurs because of the amount of work on their plate or when they get stuck creatively. In such situations, it becomes dire to consider making someone a business partner. It is in order to expand the horizon of your ambitions and reach the potential that you have always wished for but can’t alone. There are chances of you feeling vulnerable to share something so dear to you hear with someone else, but it can do wonders for your business as well. Let’s have a look at some of the potential advantages of having a business partner:
Advantages Of A Business Partner
There is a clear-cut difference between having a goal on your own and having a shared goal with another individual. If you are handling the business alone, then it often happens that you fall in the trap of letting things slide, unknowingly, and sometimes knowingly. This issue usually occurs because there is no one to hold you accountable for anything that you do wrong or don’t do at all. However, if a second person is involved and given the same responsibility of taking the business further, you will become more responsible as they will hold you accountable for all things just like you would do with them. Consequently, you stop giving up your goals and start taking everything seriously.
A Sounding Board
There are often times when people have ideas that excite them to a great extent. However, the natural human response to such ideas is making assumptions in the head and labelling It as crazy or impractical. It is not easy for a solopreneur to assess whether the amazing business idea he has is beneficial or completely stupid. However, when you have a partner alongside who is as passionate about the business as you, they will help you assess better. Sharing the idea with a live human being is far better than considering it in your head and throwing it away. A good business partner will offer your honest advice. If the idea that you have is great, then they will help you develop it. On the contrary, they will nicely make you understand why it’s not good for the business.
Someone To Pick Up The Slack
You may be great at doing a lot of things for the business. However, there will still be some stuff that you can’t really do without struggling. It could be either due to a lack of skill or simply because you don’t understand it. In such cases, it is always nice to have someone by your side. All the great partnerships are based on complementary skills of the individuals involved. The diversity of talents that all the parties involved bring in massively enhances the creativity and productivity of the business. No matter what department you are struggling in, a complimentary hand won’t hurt you rather benefit you. For instance, if you are a writer and can write incredible pieces of text but lack behind in photography to add visuals to the text, then it won’t hurt to hire a photographer. Partnerships help to balance out the weakness, and having a weakness should be no shame as nobody is perfect.
Being an entrepreneur is not always sweet and calm. It pretty much gets rough often. When things are going well, you feel amazing. However, there are always struggles involved, and every successful business has to go through them unless you are the luckiest person on this planet. These times of extreme struggles will discourage you. You may have emotional support from family or a spouse. That is good on its own, but it isn’t of much help, and it might worry them too. However, having someone around you who is thinking on the same wavelength as you will always help with emotional backup. Your partner won’t only help reduce the pressure, but he will also be the only one who knows the exact thing that you are going through. As a result, you two can get out of it better than you get out of it alone.
Everyone will tell you working with someone to increase productivity. It is something pretty obvious, but just for a moment, sit back and think about it. Think about all the times you had a long to-do list on your plate, but you couldn’t do it. Think about all the times you had to postpone your goals just because the workload was too much. When you partner with someone, all of the to-do lists and the workload will be halved. Consequently, you can be more productive than before and the same goes for the other person. It is a two-way road, and both of your increased productivity will add to the overall productivity of the business.
Apart from these potential advantages of having a business partner, here is a pros and cons list for you to weigh out the advantages and disadvantages and make an informed decision:
Pros of a Business Partner:
Here is short of list some of the most noticeable pros of having a business partner:
- You can double the work output for the business
- You will have someone to discuss and develop ideas with
- You will have someone along at all times to share your emotional journey with
- You will get someone who has diverse skills, dissimilar to yours and as a result achiever greater ground than before
- Having a business partner means having more funds for the business as you both will be bringing in funds.
Now that we are done discussing the major pros of having a business partner let’s turn our focus to some of the cons so you can make a comparison of both.
Cons of a Business Partner:
Here is short of list some of the most noticeable cons of having a business partner:
- You would have to split the total profit into two halves, so that means less income
- When two people work together in the same position in a business, the potential for arguments increases. So, you might find yourself quarrelling often.
- Sharing a business with someone is no easy task. You would have to go through the whole legal process of making legal contracts and documentation.
- There is always the possibility of the partnership not working. As a result, you might end up with a ruined relationship with the other party involved.
Things To Consider Before Getting Into A Partnership
Decisions made in haste or out of excitement usually give out bad results. Bad results are what you need to avoid, especially with your business. One should never go on to partner with someone without considering the following important questions:
Would You Not Be Better Off Getting A Loan Instead?
One of the major reasons entrepreneurs start to look for a business partner is when they run low on funds or need an extra pocket to help them achieve higher and expensive goals. It is one of the biggest misconceptions that having an extra pocket to carry the financial burden solves the problem. You should always consider getting a loan first and see if that solves the financial gap for you. In most cases, it will. Giving up equity in the business is a really big decision and simply taking it because you require funds is not good.
If you are stuck in a situation where the assets you have are not enough to get you a loan, then go for equity. However, set the provisions in a way that the equity position is won back by you in the future. What entrepreneurs usually do is that they give up around 20-25% of their business for a mere 30,000 pounds worth of investment. They forget all the sweat and brow they had put in the business to bring it where it has come and given up a big portion of it to someone else.
Have You Prepared A Detailed Partnership Agreement?
Getting into a partnership might sound easy when talking, but it is quite a complicated process to go through. All the benefits and advantages might blind you with the dreams of having better and less work hefty days. However, entrepreneurs usually don’t give much importance to legal processes such as a partnership agreement. You need to have a detailed partnership agreement to establish some rules and specify the jobs and roles the two parties will be playing in the business. How the profits will be shared and how to hold each other accountable.
It is also extremely important to protect yourself and the business. You need to consider solutions for a situation where the partnership fails. Moreover, you also need to plan in advance to protect the intellectual property of the business in case the partnership goes south. Have your business partner sign a non-disclosure and non-compete agreement.
Moreover, if you have finally made the decision to bring in a new business partner, make sure you do so with caution. Set up terms and conditions in a way that they don’t have the right to more than 49% of the votes in your business and the ultimate authority and control remains with you as it is your business.
Is My Company Likely To Generate Enough Revenue To Support A Partner?
You might get stuck at some stage in the business where you require a partner desperately. However, you may lack the proper funds to manage the pays for your partner as well as you. in such instances, it is always better to delay the partnership than jumping into something you can’t support financially.
Do You Need A Partner For Short Term Solutions Or Long Term?
You might find yourself stuck in a problem that requires an extra helping hand. However, you need to figure out the nature of this problem. Is the need short term? Can you solve it with someone’s help and won’t need them again? If your answer to these questions is yes, then sign a short-term contract with the relevant person and get your work done. However, if you need someone’s skills on a long term basis, then go for the partnership.
Finally, the big question!
Do You Need A Business Partner?
This is what the whole discussion comes down to. Do you actually need a business partner? This whole blog tries to answer this question, but there is a specific answer to it too. Business partners can be incredible for boosting growth. However, it all depends on the kind of business. A self-funded business will benefit from the funds brought in by the business partner. If the business has been initiated to solve a large scale societal or market problem, then the idea of having a business partner is great. As these kinds of business are not too personal and require a hefty amount of work, so having a business partner becomes crucial.
However, if the business in question has been started with the boost of passion and interest, then It becomes personal. In these kinds of businesses, the need for a business partner is much less comparatively. This is because such startups are small, and the workload is not much either. It is enough to be handled by a single person, and obviously, someone new can’t bring in the same passion as you.
Another interesting and helpful thing that helps to figure out whether a business partner is required or not is writing down a detailed business plan. You need to have a grip over what you are trying to achieve and how. If you know where the revenue will come from and how you will take it further, you can make an informed decision about having a business partner.
Things To Consider
Six things to consider when selecting the perfect business partner. If you have finally made an informed decision that your business actually requires a business partner, then follow these six steps:
Find a Partner That Can Bring Skills and Experience to the Business
A business partner who has the skills and vision that compliments yours is great. A single person is never capable of mastering everything business. You may have commendable interpersonal skills but might lack behind when it comes to accounting skills. So, here, you will consider someone who has great accounting skills that can go best with your interpersonal skills. The more skills two partners bring into the business, the faster it will prosper.
Find a Partner That Shares Your Values and Entrepreneurial Spirit
This is probably the most important thing to consider when looking for a partner. Communication is key when it comes to partnerships. It is essential that your partner understands your values and the spirit you bring in for the business. If he can’t work at the same wavelength as you then success will become harder to achieve.
Look for a Partner Without a Lot of Personal Baggage
This may come out as a bit inconsiderate or rude, but when it comes to your business, these things have to be considered. If the partner, you are about to select is already fighting many challenges in his personal life for whatever reason, then he is not a good choice. Giving someone a chance is a great thing to do, but it is a risk that you should let someone else take as they might make things worse for your business.
Find a Partner That Can Offer Resources and Credibility to Your Business
If a partner is bringing financial support, then it’s all good. However, there are other resources too that a partner can bring. Someone with good connections in the industry and secure relationships and a good name can be of great help.
Choose a Partner That Is Financially Stable
Being financially stable does not mean the partner has to invest financially. Their financial stability speaks a lot about their money, time, and asset management: things that are crucial for a business. If the partner is in a financial crisis due to mismanagement of funds and assets, then he is not a good choice.
Choose a Partner who knows the business ethics and how to respect
It is important to note that one should only get into partnerships with people who are honest and trustworthy. A person who has immense value for honesty and business ethics is a great option to go for. If the partner is not honest, he may steal your ideas or disrespect your business ethics, etc. moreover, it is also essential to partner with someone who you respect and who in return gives the same or even more amount of respect. Respect and loyalty are two important factors that make relationships strong, and they should never be compromised.
The Bottom Line
Many successful businesses have their foundations built by solid partnerships. However, there are also businesses that have been destroyed by partnerships. A business partner, without any doubt, is a gem of an asset to the business and the person running down the business. However, it is crucial to understand that entering into a partnership should be done with extreme caution. You should do extensive research on the potential candidates and grasp the full image of what you are getting yourself into. If you don’t take this step with care, you will most likely regret your decision.