In the previous post, we considered why conflict occurs in a business partnership. Now we know the potential risk of collaboration, we have complied a list of advantages and disadvantages of forming a company with a business partner:
Shared Liability – Beginning the company formation process and getting your business off the ground, is a huge financial and personal responsibility. Partnerships provide support and advice.
Skills – Running a successful company, requires a broad range of knowledge, experience and skill. Very few people possess all of these strengths on their own, having a business partner means having access to a wider skill base.
Strategic Direction – Taking a business concept and turning it into a commercial reality usually requires and huge amount of commitment and passion. While this provides great impetus, it can also lead to static strategy. Having a business partner brings a different perspective to decision making and often helps achieve more creative solutions and dynamic strategy.
Less autonomy-Having to share the future aims and objectives for your business and how you plan to get there, with someone else.
Different perspective on the allocation of profit -People have different views on how they want the company to grow; some are hugely ambitious and are willing to invest all the time and money necessary to facilitate huge expansion, while others are happy to establish a status –quo.
Decision making -Additional perspectives, objectives and previous experience, means consensus is hard to establish. Subsequently, the decision making process can be laborious and prolonged .