As an entrepreneur with various interests, I often find that partnerships are a great way of bringing ideas and businesses to life in an efficient way. Very few of us possess it all: Financial acumen, marketing prowess, business development skills, sales background, operation experience, etc. With everything one needs to start a business, often time partnerships provide the perfect solution by bringing different talents and skill sets together to create a perfect union. While there are many pros to partnerships, a bad partnership that lacks trust, understanding and shared values, can also result in a business failure and emotional distress.
Here are some pros and cons of partnership business you should consider when deciding on whether to form your business as a partnership or bring on a partner if you are already in business. There are times we also consider a partner for a particular project or event.
Varied Skill Sets
Having a business partner that has a different skill set that you possess is a great asset to any business. This means less outsourcing and less chance of burn out by one person as you don’t have to manage everything. One person can focus on sales and marketing, while another thrives in the realm of operations.
For one specific project I was doing, I needed to do a lot of video, editing, and photography. I realized for this particular undertaking a partnership would make sense because the sheer amount of video and editing that needed to be done would cost a fortune if outsourced. I was able to find a creative that shared my entrepreneurial spirit to invest both financially and creatively to the vision. Also, diversity in talents allows for greater growth faster because each individual can focus their energy on one or two things as opposed to spreading one person thin. I did not have to go learn videography (which I considered), which would have delayed me tremendously. A jack of all trade definitely moves at a slower pace than a master of one.
As brilliant as we may be, in business it is always great to have someone to brainstorm ideas with. Even in ventures where I don’t have partners, I am constantly asking and reaching out to colleagues to get another perspective. Especially as entrepreneurs and business owners that cater to others, we need to ensure we do not focus strictly on whats inside our own heads. A partner allows you the viewpoint of another and can allow you to create and plan from a broader perspective
As beautiful as entrepreneurship is, one can easily lose sight of what needs to be done. With no one to tell you when to wake up, when something is due, or when to put a deadline on a project, you can fall really behind in your business. If you do not have the sheer self-discipline and will to put those timelines and barometers on yourself, you can easily lose track.
A partner makes it that much easier to stay on track as they serve as an accountability partner. As driven as my circle knows I am, I too get into a lazy mode. But when I know I have someone else waiting for me to deliver, there’s no way I will not come through. So, for those of us with strong work ethics, a partner keeps us from falling too far behind when those lazy moments strike.
A loss is never a real pro. But losing $10,000 of your own money is way harder than losing $5000. It is in those times that a partner can also make the entrepreneurship journey a little bit easier. A bad launch, a product fail, a costly decision split between two people is way easier than enduring it alone.
As much as I suggest getting a partner when the situation is right, there are some cons that can come from partnerships. I have experienced a few bad partnerships, but luckily, I have learned and grown. But many of these cons are avoidable if thorough research is done or time is given to get to know your potential partner.
Differing Work Ethics
One of the biggest issues that often arise out of partnerships is the lack of commitment by one of the partners. If you are a “no sleep until its great” type and your partner is a “I’m out by 5” type, this can cause a lot of issues. One partner may be putting in way more hours than another and that can create tension. Especially when it’s time to split profits. This can lead to resentment. As a person who is naturally motivated, it frustrates me to have to constantly run after a partner to get work done.
Whether it’s your idea or theirs, once an idea is accepted, all parties need to work towards bringing that vision to fruition, with all their might. If you wanted to run after someone, you would get yourself an employee. I have seen this type of issue with many friends turned business partner. This is not to say not go into business with friends, but make sure the work ethic is the same.
Friends accept each other with all their flaws. Partners are less tolerant. Flaws that your friendship may be able to overlook, a partnership cannot as they may impact your bottom line.