You've wanted to start a business with your best friend for years--or perhaps you know a business associate with complementary skills whom you feel would be a great partner. While it's tempting to go full speed ahead, parse out the pros and cons before deciding on a partnership. Though there's no single answer for everyone, two experts weigh in to help you decide what's best for your business.
Pro:Terri Zwierzynski, a business coach and founder of Solo-E.com Inc. in Cary, North Carolina, likes partnerships because two people can get a lot more done than one person, and each partner can work in their respective strong areas. Partners might also have different financial resources to call upon for the business--which doubles your network. Particularly if you're close to the person already (a friend or family member), you know that person's work strengths and habits. This person can also see the areas you might be blind to.
Having a business partner means that person is just as invested in your company's success as you are--and will work harder than any employee or contractor because of that. If you have a partner, "It's a lot more fun to celebrate when you have a big win," Zwierzynski says. "That person can also help you be resilient when things don't go well."
Con: Paul E. Casey, founder of Casey Communications Inc. in Seattle and author of Is Self-Employment for You?, notes that going into business with a partner can be risky. "If you enter into a traditional partnership, 50 percent of your income is immediately going to your partner," he says. And you'll have to buy twice the supplies. Making decisions for the company also takes longer because you have to run everything by your partner.
Partnership can be even more dicey with a friend or family member. "I'm a strong [proponent] of keeping friends or family out of your business," says Casey. "[If it doesn't work out], the family relationship becomes very strained, and friendships break apart."
If you lack strength in certain areas, you can farm out that work to contractors and not give up any stake in the business. And your mind-set at the beginning will likely change with time. Says Casey, "You and your partner may be looking in the same direction now, but with a dynamic change in the marketplace today, [that's] bound to change. That's where I've seen friction develop, too."