Thinking of starting a business partnership? Twice the success or twice the stress?
Starting your own business partnership with a friend, colleague or partner may turn out to be one of the best decisions you ever make but it’s a decision you need to think carefully about. Going into business with someone requires a lot more than just liking each other and has both upsides and downsides.
Here are three important things you need to think about:-
1. You’ll be spending all day together
We set so much store by finding the perfect romantic partner, yet your business partner may actually be the person you end up spending the majority of your day with. And when you’re running your own business, those days can be long.
Pros: Assuming this is someone you know well and can work well with and trust that is a fantastic combination. Running a start-up can be isolating and it can be hard for other people to understand what it’s like if it’s not something they’ve done themselves. Having a partner gives you someone to share the highs and lows with.
Coach Todd Emaus had this business start-up advice to offer on US small business website allbusiness.com:-
“Building a business is a surprisingly emotional journey, and entrepreneurs need support along the way. Nothing compares to having a co-founder who is in it with you.”
Cons: No matter how much you like each other, when you are seeing each other day in, day out and dealing with the stresses and pressures of work, you will almost certainly get on each others’ nerves at times – or worse. People can react badly under stress.
They say you don’t know someone until you live with them – just try running a business with them!
2. You will disagree at times
How you deal with differences of opinion is about both your individual personalities and how those personalities combine.
If you find it difficult to compromise, you may be better suited to going into business on your own. But even the most stubborn of us will usually have some people whose opinion we respect and value enough to bend to it sometimes.
Pros: There are two (or more) people to make the big decisions. You have someone else to bounce ideas off and discuss difficult scenarios with and a safe place to express concerns, weaknesses and doubts.
It’s actually helpful if your co-founder doesn’t always agree with you, as it means they’re challenging you and bringing new perspectives and solutions. And when you do agree, it’s much easier to be confident in your decisions if you have someone else to back them up.
The support of another person who shares your values can make it easier to stick to those values in situations where they might be compromised – for example, if a client wants you to do something you don’t think is morally right.
There is also another person to shoulder the responsibility if things go wrong.
It’s much easier to refrain from berating yourself for a choice which turned out to be wrong if someone else – whose opinion you value – also thought you were doing the right thing.
Having a co-founder or partner means you’re working with someone who knows your weaknesses and can help you head off the worst of them. Whether that’s excessive worrying or obsessive perfectionism, they can provide balance for these traits. We may know our own weaknesses in theory but acknowledging and tackling them in practice often requires outside input.
As Bryan Bedera, from US public relations firm Amplify Relations told allbusiness.com:-
“Cofounders hold you accountable. My co-founder and beloved wife, Megan, never had an issue challenging me when needed.”
Simon Berg, CEO of content company Ceros, adds: “They can say things to you that your executives and employees won’t, even in a transparent culture.”
Cons: You don’t have complete control. You can’t always do what you want, or do it as quickly as you would like to.
3. You rely on someone else taking a fair share of the work in a business partnership
It’s really important to make sure both partners share a similar work ethic. And that doesn’t mean two workaholics. For your business to be successful in the long term, you want two people who will both work hard but who understand that work-life balance, family and health also need to be prioritised.
Pros: Assuming all the above is true, you have two pairs of hands and therefore twice as much time available in the day. Even the biggest to-do lists and stresses are halved.
There’s someone to hold the fort while you take a holiday, are off sick or need to look after your children or elderly parents.
And as we often say, you alone are unlikely to be great at every aspect of running a business. Having a partner gives you two sets of skills; it can be invaluable to have someone who can breeze through the jobs that would tie you in knots.
Cons: They might not pull their weight as you’d hope, in which case resentment can grow fast.
It also means that any financial take-home is split. This in turn means you’ll need to have the money at hand for at least two people to earn a living, as well as cover the costs of office space, materials, utilities and whatever else you may need on a monthly basis.
Between you, you’ll need to work out what a fair and viable wage looks like, explore the use of dividends and more.
Just like that perfect partner, at THP Chartered Accountants we can take jobs off your hands that you don’t have time to do yourself. And we’ll help you talk through and think about the big decisions, giving you the benefit of our experience.
Not only do we provide accounting services to companies across the south east, but we can also advise on the legal aspects of running and expanding a business partnership.
About Mark Boulter
Mark Boulter is responsible for the efficient running of the firm’s infrastructure, and ensuring that THP delivers the best client service. Promoting the vision and culture across all branches, people are the key: “I like people who have a fresh approach and I’m happy for them to run with their ideas,” he says.
Communication across departments is crucial and Mark pioneers this. He ensure that people and departments not only talk to each other, but that they share ideas– whether they’re about marketing, finance, sales, strategy or any other topic that can result in us offering a better service. “I think helping to develop the next generation of THP people is essential to our success,” Mark adds. “We’ve a lot of talented people and our way of doing things increasingly attracts ambitious newcomers who are looking for a fresh approach. That’s good for us and even better news for our clients.”