Pros and Cons of Partnership

A partnership involves collaboration between two or more parties.

There are many advantages, as well as disadvantages, in running your business as a partnership.

Some advantages include:

  • Shared Burdens – Because there are two or more people involved, a partnership enables the burdens of the business to be shared.  Partners give each other mutual support, as well as business companionship, especially the facility of having a good sounding board before decisions are made.
  • Different Views – It helps if problems are looked at from different angles.  This is possible where there are two or more people, because often one person’s view is totally different from how the other person sees the same problem.  More people, therefore, equal more perspective, which can arise in more creative ways of meeting difficulties in a business.
  • Experience and Skills – The partnership allows you more access to knowledge, experience and specific skills.  It provides a wider skill base, as well as complimentary knowledge, such as technical, financial, etc.
  • Effective Decisions – A partnership enables decision making to be more effective.  Each partner brings different views, opinions and perspective on the problems that arise and it is often easier resolving situations quickly because of the different input from partners.
  • Never Alone – Any business can be stressful and frightening.  If you are on your own it can also be very lonely.  Having someone else working alongside you will make the load a lot lighter and less of a burden

Some disadvantages include:

  • Conflict of Opinions – Unfortunately, partners often have different views about their own personal goals and future, and this may not be compatible with the other partners.
  • Spontaneity Loss – Because each partner needs to be involved and in general collaboration needs to be based on a majority vote, there is a definite loss of spontaneity, which can result in a loss of opportunities.
  • Uneven Ambition – Some partners are ambitious and full of “go” while other partners are prepared to run the business with a more “laid back” attitude.  This can cause friction and suspicion, because while one partner wants to build a huge empire, the other may be satisfied with simply running a good business that provides a good living while providing a quieter lifestyle.
  • Slow Decisions – Having a partnership makes for slower decisions because every partner has to be brought into the discussion and this can slow things down considerably.  Because consensus is generally needed, decision making is often delayed and this can result in lost business.
  • Reduced Autonomy – There is a lot less autonomy when you have to work with others.  One partner cannot always make a quick decision if a major issue arises that needs the consensus of two or more of the partners – especially if the 2 partners are not available or overseas.
  • Resentment – Where partners generate different inputs, by way of skills and time, resentment often arise because the rewards are not fairly matched by the effort contributed by each partner. This is a very real problem.
  • Different Aims – What often develops is that there will arise many points of disagreement regarding the personal aims and objectives of a business because each partner has his or her own slant on the way forward.  This can cause friction and grudges, if allowed to occur.
  • Many Disagreements – Disagreements arise all the time with partnerships because the business has to deal with the human element and the egos of each partner.  The cost of resolving conflicts, which may involve legal confrontation, can be a heavy load on the business’s resources.  Conflicts also bring about a lack of flow in the processes, so the business is disadvantaged “big time”.

© Copyright StartRunGrow