Pros and Cons of Partnership

Many people would love going in the business with a partner for variety of reasons. At the same time you will find equal number of others who hate the idea of working with a partner and losing independence. What is it about the partnership that brings different reactions from different sets of people? In this article we will highlight the pros and cons of being in a partnership.

Pros

• Brings complementary skills. Let’s face it. Different people are good at different skills. Some people may be better at numbers; while others can handle the customers more skillfully. By working together the business can accomplish more than if it is run by one person alone.
• Opens more opportunities. This can work in multiple ways. By working with partners you can expand to more locations, expand the business to broader customer base and so on.
• Reduces risks. Partnership pools resources – be it money, time or effort from multiple people. This reduces the burden on any one person and results in less damage in case of failure. This is particularly helpful when you are fairly new at the business when chances of failure are typically higher than normal. An added benefit is that it also increases the chances of success for the reasons mentioned earlier here.
• Provides Learning Opportunities. Along the lines of benefits highlighted in complementary skills partnership also provides an opportunity to learn from each other and expand your skills. In my mind, this is one of the most overlooked benefits of partnership that deserves more attention.

Cons

• More difficult to manage. Partnerships by its nature are more difficult to manage compared to working alone. When there is only person in charge it is understood clearly where the buck stops. However, involvement of more than person can trigger finger pointing and politicking at the detriment of the business. It doesn’t have to be this way, though. By properly delineating the duties and responsibilities the business can be managed in a more streamlined fashion.
• Can take longer for decisions. As mentioned in the previous paragraph involvement of more than one person can introduce inherent difficulties. When decisions have to be signed off by all the partners it can take forever to get things done. If there are differences of opinions between partners things can get even more complicated and can ultimately lead to the failure. The solution here is to again identify who is responsible for making certain decisions. Other than important strategic decisions the partners should divide amongst themselves the small decisions that need to be made and let them move forward without asking for consensus every time.
• Others can take advantage of disagreements.If you have raised kids you know very well how this plays out. The kids will play Mom and Dad against each other to get what they want. Similar situations can occur in the partnership too; particularly when the outsiders sense disagreement and tensions between the partners. That’s why you should make it a rule not to dry your dirty laundry in front of outsiders; but to take care of them behind closed doors.

As you can see partnership is a double-edge sword; however I do believe that as long as you manage it well and with clear understanding and expectations it can work well.

What have I missed from the list – both pros and cons? What has been your experience? Do let us know in the comments below.