Should You Consider A Business Partner When You Start A Business?
Amongst the crucial decisions to be made, as you prepare to launch a new business, is whether or not bringing a partner into the mix is a wise move. It is certainly a choice with long term impact; one that deserves a closer look at the positives and negatives.
A partner can certainly be an asset – if the stars are all aligned – but without taking time to check all the boxes you could end up in a real quagmire, to say the least.
As you are no doubt aware, the UK allows for various shared-ownership structures; such as Limited Companies, Business Partnerships, Limited Partnerships and Limited Liability Partnerships. For the purposes of this post, we are speaking ‘across the board’ – referring to a business partner as any individual with whom you choose to share ownership.
We have outlined a few important pros and cons of the partner relationship, followed by suggestions of qualities which they might ideally possess. Of course, obtaining legal advice for business structure is always encouraged, to ensure a fair division of responsibilities and a mutually agreeable distribution of control and profits.
Business Partner Pros
- Broader range of expertise and skill sets
- Shared risk lessens stressful situations
- Additional capital infusion increases stability
- Extended business network opens more doors
- One can hold down the fort for the other
- Two heads are usually better than one
Business Partner Cons
- Loss of sole control may be challenging
- Family relationships or friendships may suffer
- Unequal investments could be awkward
- Sharing the fate of your business might be risky
- Shared vision and purpose may conflict
It’s interesting to note that most of the cons listed here could actually be neutralised with well-constructed small business legal documents. When boundaries are defined and expectations set, the partners can relax into their respective roles. Putting asset protections in place and ensuring company finances are intact, will go a long way in keeping any business afloat – especially when multiple owners are involved.
What Makes A Good Business Partner?
Many times we want to believe that a family member or good friend is the perfect choice for our business partner. Unfortunately, this is seldom the case. In fact, family businesses can be an unrelenting test of our patience, and as such should come with their own specific parameters. Choosing a close friend as your associate, and adding long hours and tough decisions to the mix, could ultimately result in chaos and loss of the relationship altogether.
So, what kind of characteristics should you look for in a future business partner? What would successful shared ownership look like? We’ve put together a starter list to inspire your search.
10 Desirable Business Partner Traits
- Solutions oriented – able to identify and act on a problem; no complainers allowed
- Brings new things to the table – ideally they will have expertise in skills you lack
- Enjoys being part of a team – avoid short tempers or controlling personalities
- Similar ambitions and values – you need to be on the same page when things get complicated or difficult.
- Ready to share the load – must pull their weight as a working or silent partner
- Can draw within the lines – is able to commit to defined parameters of responsibility
- Walks the walk – trust and respect are at the root of great business relationships
- Passionate about the idea – it’s the great motivator and the glue for commitment
- A natural brainstormer – the ability to bounce ideas off each other is a prime requisite
- Leader material – delegation is a necessary element to business growth