The Partnership Question

A most common question is whether you should buy a business with a partner or buy on your own.

You can consider the answer much as you would a franchise, for in reality a franchise is a form of partnership.

What are the pro’s and con’s of bringing in a partner or two?

      Advantages:

1. A partnership may provide the confidence and psychological support needed to take the plunge into your own business. Oftentimes a partnership is nothing more than an arrangement where two individuals can muster the collective courage to do what they fear independently.
2. The right partner, selected to balance your management skills and interests can lend strength to the overall management of the company. The best partnerships create a “synergy” where far more is accomplished than could be done by the partners alone.
3. The capital a partner can add can be important. It can allow you to substantially improve the capitalization of the business and build it faster or acquire larger business.

Disadvantages:

1. The success of a partnership depends on the ability of the partners to get along and develop a good working relationship. It can be extremely difficult to avoid conflict and it becomes near impossible if you have more than one partner.
2. A partnership will add financial strain to the business unless the partnership allows for the purchase of a “two paycheck” business.

A partnership is no better or worse than the person you select as your partner.  Never accept an active partner on the basis of financial need alone.   A partnership should only be considered when you are confident you found an individual who you trust, have confidence in and enjoy working with.