Before starting your own business there are countless fundamental questions that people should ask themselves. Why is the service I am providing better than that of the competition? What is the ideal way to enter the market? Is there eventual room for expansion or is the business model limited to a specific niche in a single region?
The questions that entrepreneurs must answer do not have easy answers, and to make things more difficult, the necessary questions are not always immediately apparent. One common concern that potential business owners must address is whether they should go into business by themselves or with a partner.
IN PICTURES: 8 Tips For Starting Your Own Business
Partner or No Partner?
Consider the following advantages of embarking on your next entrepreneurial venture by yourself contrasted with the pros of going into business with a partner.
Doing It Yourself - Full Control of Decision Process
Perhaps the biggest advantage of forgoing a business partner is that you would have full say in the operations of the organization, not only in terms of the initial set up process, but any subsequent decisions as well. Having a clear vision that the business must adhere to minimizes the inefficiencies that arise when others deviate from the original plan.
Doing It With a Partner - More Perspective
Partners can help spot flaws in a business model, help ask the right questions and offer valuable opinions regarding operations. Since many individuals may fail to consider the minuscule yet essential details of a business, a partner can help paint the entire picture. (For more, check out Top 7 Myths About Starting A Business.)
Doing It Yourself – Won't Ruin Friendship
Business disputes can often result in a ruined friendship with your partner. Disagreements about strategies and effort commitments are common reasons why many partners can no longer continue working with one another.
Doing It With A Partner - Build Strong Friendship
Planning and running a business, especially if it is successful, can be a fun and rewarding experience. Facing the daily challenges of entrepreneurship can lead to long-lasting friendships. Therefore, if the first business venture does not work out, finding a partner for the second should be easy.
Doing It Yourself - Get Out What You Put In
If all hard work yields a profit, then a hard -orking entrepreneur would be driven to devote all of her time and skills to the business. Working individually would provide the necessary motivation needed to achieve optimal results since one cannot slack, knowing that their partner will pick up the slack. (For more, see Start Your Own Small Business.)
Doing It With A Partner - Shared Time Commitment
Many individuals who dream of being their own boss are not prepared to quit their current profession to pursue something that might fail. Since most planning and organizing has to be conducted during work hours, having a business partner splits the necessary time requirements accordingly to accommodate one's hectic schedule.
Doing It Yourself - Reap Full Rewards
When a business becomes successful, those who pursued the dream through their own efforts reap the greatest amount of income. Rather than sharing the benefits with another, the single business owner stands to profit exclusively.
Doing It With A Partner - Reduce Risk
In contrast, partnerships allow owners to reduce the risks associated if the endeavor fails as all financial and time related losses will be distributed between the parties. In some circumstances, a single individual will not be able to obtain the necessary start-up funding, thus a partner becomes not only advantageous, but mandatory. (For more, see Six Steps To A Better Business Budget.)
Doing It Yourself - Can Learn Additional Skills
Struggling to establish contracts with suppliers, relationships with customers and general business know-how serves as the best skill building practice. These skills can then be applied to other aspects of the existing business or to future endeavors. While someone involved in a partnership will undoubtedly learn some of these skills, they may miss out on others.
Doing It With A Partner - Combined Skill Sets
Some people have an aptitude for technical skills, techniques such as forecasting and building inventory models, while others have solid interpersonal skills. When both managers apply their given qualities to the business, synergies that are impossible with one owner can be achieved.
Which Model Is Right For You?
More often than not, the ideal ownership structure is determined on a business to business and person-to-person basis. Those who attempted to run a business individually, but failed, will curse themselves for not seeking a partner. On the other side of the fence, those who single handedly produced a profitable operation, are delighted that they do not have to share their profits with others.
Before embarking on your next business quest, you'll have to decide if a partner is right for you.
Check out last week's business highlights in Water Cooler Finance: My iPad Beats Your Toyota.)
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