There are certainly many positive upsides to starting a business partnership. Your business partner can bring new perspectives, additional financial capital and additional skills and abilities to the business. Many businesses are only successful because they are partnerships, and that success would never have been reached by either of the partners on their own.
That being said, there are also some disadvantages that prospective business owners need to consider when deciding if they want to use a partnership or not. Let’s look at three examples below.
You don’t have full control
You have to give up some of your autonomy and ability to make all decisions if you’re going to have a business partner. You no longer have full creative control, for example. You have to compromise and work with your business partner to make these types of decisions.
Exiting the business can be more complicated
If one person wants to leave the business, it’s much more complicated with a partnership than if that person is working on their own. You can’t just shut the company down and walk away. You may be bound by a partnership agreement that stipulates that you have to stay at the company for a certain amount of time or take very specific steps when leaving. It can also be difficult to divide up assets and investments that people have made in the business when one partner decides to leave.
Conflicts may arise
Finally, working with a partner may lead to conflict. Maybe you both have a different vision for what the business should be. Perhaps you feel like your business partner isn’t pulling their weight and you are doing 90% of the work. Disputes and conflicts can happen for a plethora of reasons.
Again, this isn’t to say that you shouldn’t use a business partnership. Just be sure you carefully consider all of the legal steps you can take – like creating an official partnership agreement – to help things go smoothly.