As the saying goes – teamwork makes dream work. For many entrepreneurs, running a business single-handedly can be physically and mentally exhausting – and sometimes lonely too. Perhaps you’d like to expand but need additional funding? A business partnership can be infinitely rewarding. However, a lasting business relationship is a bit like a marriage: Built on trust, respect, dependability and common ground. If you’re ready to get a business partner, take a look at the advantages and disadvantages of this shared arrangement to see if this is the right decision for you.
The advantages of partnership
Are you ready to share your ‘baby’ with someone else? A partner could mean many positive things:
- A welcome cash injection: If you sell a percentage of your business to a partner, you will receive a nice lump sum of cash to invest back into the business.
- Twice as much manpower: If you usually work around the clock, a partner can mean sharing the load – and actually having a weekend off for a change.
- New networking opportunities: Tap into their network of suppliers, customers, investors and mentors to take your business to the next level.
- Fresh skills and a different perspective: Maybe it’s time to change the way you’ve been doing things for years. A fresh outlook will help you re-evaluate your business.
- A brain to pick: You no longer have to pester your spouse with your business issues. Now you have someone to share all your ups and downs with – someone who can help you grow by defining your plans and ideas.
- Accountability: A partner will keep you focussed and on the ball. They will help you keep an eye on things like cash flow and expenses.
The disadvantages of partnering up
Here are some potential challenges to consider when taking in a business partner:
- Disagreements: No matter how well you work together, at some point there will be conflict and quarrels. This runs the risk of causing uncertainty for your staff and may even result in poor performance.
- Sharing your profits: Splitting your cash should be in line with how much effort is put in – you have to be sure you are comfortable with this arrangement.
- Putting your reputation on the line: An unscrupulous partner can do a lot of damage to your name and the reputation of your business.
- Different work ethics: Before, it was just you making all the decisions. Now, you may have someone who thinks and works differently, or who has more or less passion than you.
- Being accountable for losses: In a partnership, you take responsibility for whatever happens in your business. If your partner breaks any laws, you maybe held accountable too.
The next steps
Before you set up office together, be sure to ‘test-drive’ your relationship. Try doing a few presentations or proposals together, or working together over a few weekends. You could also use a third party to run a background check on a prospective partner. Whatever you do: Don’t rush things. The right partner is worth the search and worth the wait. We’ll help you find the right person by asking the right questions – read more in this article.
Take a look here for more business advice from Santam.