Pros and cons of business partnerships

Any partnership, and especially in business, is always difficult, it is always people. And where there are people, there are emotions, and consequently, problems.

At the moment when you create a business with a partner, you have expectations both for the partner and for the business, and for the results of the business.

You expect the business to develop successfully, without stress and unnecessary problems. With regard to a partner, you expect that he will bring money that he will invest in business and connections that will help the business and his knowledge and much more.

Due to what your partner will bring to the business, you will get more freedom and time. After all, you are not alone now.

But for the same reason (you are not alone) you will have more than one point of view in business. And when assessing the situation, you will be able to see the risks and opportunities from different angles. And this is good for business. This is another positive feature of the partnership.

But at the same time, there are downsides to partnerships. And especially in business partnerships.

First, you lose your independence. If you create a company where you are the sole owner, you make all strategic decisions yourself and only you receive all the profits. If you have a partner, even with a minimal share, then you need to consult with him and share the profits. And this is not always desirable, for various reasons of course.

But in any case, you lose independence. Your stake in the business gets smaller and you get less money.

The main thing here is not to fall into the trap of “I will earn more money myself.”

What is the trap? If the owner alone earns 1000 units, then why should he give 20% in the company to a partner? To earn 800 instead of a thousand?

But if you set things right and with the help of a partner make the company earn 2000, then it turns out that 80% is now a little more than the previous 100%. That is, the partner you attract must give you much more than the costs associated with the partnership.

When you choose a partner, you must consciously weigh all the pros and cons that you will receive with a partner. Perhaps you decide that the share in the company that you would like to give to a potential partner is too large or too small.

But in any case, you need to assess the situation as a whole.

One of the tips I can give you is to write down the pros and cons of a potential partnership on paper.

In order to make it easier for you to evaluate the pros and cons of a partnership, I have a checklist of “10 questions for yourself” that you need to ask before entering into a partnership. Follow the link and download.