Business partnerships are still very common, and they are a great way to grow your business and delegate responsibilities. Business partnerships can also be a great way to expand into a market you don’t know very well.
However, going into a partnership also means that you’re giving away some of your control. It also means that you have to share some of the profits and make sure that it is fair for both parties if you want to avoid disputes. This is why it’s very important that you understand what it really means to be partners with somebody, and whether it’s the right choice for you.
Here are some of the pros and cons of business partnerships.
Pro – More Sets of Hands
If you were working alone, chances are you had to wear tons of different hats at once. You were probably responsible for advertising, sales, and even some accounting functions. But with a partner, you can divvy up the tasks and make sure that you use each other’s strengths. You’ll be able to alleviate your workload and get things done faster.
Con – You Never Truly Know Who You’re Working With
Even if you decide to partner up with a family member or a friend, you never truly know how the money and the business will change them. You also have to be extra careful if you’re thinking of going with someone you didn’t know before.
This is why it’s important that you take your time during the vetting process. Ideally, you should know a person for at least a year before you decide to embark on a business venture with them. Another thing you should do is conduct a thorough background check on them.
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Pro – They Can Compliment Your Skill Set
The goal of a partnership should be to complement each other in order to take things to the next level. With a partnership, you want someone who excels where you lack. If you need more marketing skills or don’t feel like you have the people skills needed to sell, then you need to find a good salesman with a knowledge of marketing. Then you can focus on what you do best.
One prime example is Apple. A lot of people still don’t know that Steve Jobs had very little technical knowledge about how computers worked and were built. But what he had was a brilliant imagination and a deep knowledge of people and marketing. Steve Wozniack, on the other hand, was the person dealing with all the nuts and bolts. Yet, neither would’ve been where they are without each other.
This is why it’s important that you look at your skillset realistically and see where you could need help. And also see if you absolutely would need to take on a partner with the expertise. There are some cases where you could simply work with a consultant or outsourced solution. So, take that into consideration as well.
Con – You Will Butt Heads
Even if the two of you were on the same page at the beginning, there will be some disagreements. Maybe one party may not be happy with the direction the business is going in. Or they might feel like the other side is not holding up their part of the bargain.
So, if you have trouble finding consensus, and are strong-headed, then chances are a partnership might be difficult.
But one way that you can prevent disagreements is by making sure that you have the same vision from the get-go. And make sure that you have it on paper as well. The agreement should not only look at both parties’ responsibilities but also what your vision is for the future of the company. Things like expansion, for instance, can be a cause for disagreement, and one party might be more aggressive than the other.
You should also look at such things as advertising methods and budget. This is another area where a lot of partners tend to disagree. One might not believe in a particular method for example, or one might want to be more aggressive. This is why you also have to look at your marketing plan for the next few years and make sure you’re on the same page.
Partnerships can be great when both parties understand their role and are willing to play their part. However, it’s essential that both know what to expect, and are ready to take on the challenges that come with them.