Many people are tempted to start a business with a friend or an associate thinking if one person can start a successful business, than two must be able to do the same, only better, faster, and without as much risk of failure. They figure that two heads are better than one and having a partner provides extra security with two people working towards a common goal. The problem with this scenario is that sometimes two heads are not better than one and it is rare for two people to have the same long-term goals. What follows are five reasons why you would be ill advised to start a business with a partner.
The first reason you should stay away from starting any business with a partner has to do with decision-making. If you and a partner agree that each of your decisions carry equal weight then it is only a matter of time before you run into a problem where you are not going to be able to agree on a course of action.
The next reason you would be better off without a partner has to do with money. Most businesses do not make a profit for quite a long time and the longer a person goes without income, the more likely they are to get out of the business. If you have a partner with whom you split all the money, then the time it will take before the business is able to support you will have essentially doubled.
The third argument against having a partner concerns the work ethic of each partner. What will happen to the business if one partner ends up doing most of the work? What will happen to the friendship the partners shared before starting? The answers are easy, but the fighting and finger pointing that will likely occur will be anything but. This is one of the most common reasons for partnerships to break up.
The next reason it is not advisable to go into business as a partnership is because of the differing long-term, and even short-term, goals the partners are likely to have. If you ask, people going into business will give many different answers to what they are looking to get out of it. These are likely to include making enough money to support themselves and their family, provide a secure way to make a living not dependent on an employer, to make a difference in the lives of others, or maybe to simply prove they can do it. The answers are as varied as the people you ask, and that is a problem because each partner is actually working towards a different goal.
The final reason to not start a business as a partnership concerns trust. Will you be able to trust this person with everything you own? You better, because that is exactly what you will be doing. Liabilities entered into by one partner become the liabilities of both and if your partner decides to not pay, or skips out on you, you will be responsible for the entire amount.
Starting a business can be difficult and expensive and even overwhelming, so why make it more difficult than it needs to be? Forming a partnership with a friend, an associate, or even a family member can look like the answer to all these potential problems but the reality is usually quite different.
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