According to William D King norms, when looking to start a business with one or more partners, it might be essential to form a business partnership.
This allows both (or more) parties to divide ownership of the business and proceed forward with mutual understanding and a particular business structure.
However, there are other factors at play that must be considered when deciding which structure to opt for, such as taxes and paperwork.
For this reason, it makes sense to weigh your pros and cons and choose whichever structure offers the correct balance of benefits and protection.
If you do decide, however, to go into partnership, there are certain pros and cons you must take into account
Pro #1: More Hands on Deck
If you’re the sole owner of a business, things can get pretty hectic if you handle all the tasks alone.
The workload can get to you, which might translate to sleepless nights, long hours at the office, and other pressing problems.
This is where the main benefit comes into play. According to William D King, with more business partners, you can easily divide tasks to get things done much faster. On top of this, it becomes possible to take on more work and skyrocket the trajectory of your business towards maximum growth.
Pro #2: More Knowledge
There are more minds at play to solve complex problems you wouldn’t be able to alone.
You can benefit from your partners’ knowledge on matters you know little about.
There is a certain advantage to having more knowledge and experience within a business structure. It makes it easier to think critically, implement new ideas and reach better decisions.
Solo ventures can quickly turn into an echo chamber with regurgitated old ideas. It helps significantly to have feedback sessions and pick your partners’ minds to arrive at new solutions to existing problems.
Pro # 3: Better Financial Options
Starting a business requires a good amount of capital. It can get expensive with no one to split expenses.
This is where the business partners come in to contribute financially and relieve some of your financial burdens.
The business becomes able to buy things up-front, and there’s a low chance for accumulation of debt.
Con #1: The Decision is Not All Yours
You cannot make solo decisions that impact the business as a whole. You cannot work independently.
Decisions must be reached through open communication with all partners involved.
If a partner acts rashly and makes an impulsive decision without consulting the others, it means everyone will face the consequences of their action.
Con #2: Profits Are Shared
All the profits are shared between all partners, significantly lowering your return from the business.
Con #3: There Are Disagreements
Conflict can arise as a result of having multiple partners. You can become tired of working with each other, and it may not be easy to dissolve the partnership.
For this reason, it’s useful to think of an exit strategy beforehand.
It is crucial to consider the pros and cons before getting into a partnership to decide if this is the proper structure to follow says William D King.