There are many things to consider when launching a new business venture. One of the first decisions you’ll have to make is whether you want to found your new business solo, or with one or more partners. If you go it alone, all of the responsibility is on your shoulders. Think about it, are you an expert in all aspects of running a business? A partner may bring much-needed knowledge and experience. Most people don’t even consider adding a partner when they’re launching their new enterprise. Should you? Allbusiness.com takes a look at the pros and cons of having a partner from the outset, we hope you find their tips helpful.
Pros and cons of starting a business solo
- A sole proprietorship is the simplest organizational structure.
- There won’t be conflicts about business decisions.
- You are indisputably the source of your own success.
- You need to do it all, even though you’re not expert at everything.
- You can’t go on vacation without shutting down the business. Or you use technology to take business along on your vacation.
- The greatest potential problem? You have no sounding board for your ideas, and nobody to provide a second opinion. This is the flip side of the “no conflicts” coin.
Pros and cons of starting a business with a partner
- More heads are better than one. Professor Ed Roberts of MIT Sloan School found in a study that the probability of success increases with team size up to four or five entrepreneurs.
- Partner(s) contribution to startup capital allows you to scale up your business sooner.
- Chances are better that you’ll have the right talent for all facets of the business.
- Decision-making is difficult if the partners are of different minds; conflicts will invariably arise.
- You need to choose a suitable organization structure to meet the needs of all partners. Will some be limited partners?
- An exit strategy is much more complicated, and at the same time is more necessary.
What should you look for in a business partner?
The ideal partner complements your shortcomings with corresponding strengths, shares your values, and is respectful of your opinions. Sounds a lot like a marriage, doesn’t it? Partners need to share your belief that the business idea has legs and be willing to invest time and money proportional to their share of the business.
Whether or not to partner up is just one of the many decisions you have to make when starting a new business. I’ve done it myself and have learned a lot along the way. I want to share my hard-won knowledge with new founders. So, I launched my podcast The Business Behind Small Business with my co-host Chloe Lee. In each episode, we give advice on starting, and running a small business. We both are enjoying sharing our expertise with our audience. So, be sure to listen, it’s available wherever you download your podcasts.