Starting a business venture without a partner may sound scary, after all when you are starting with something new, you need someone to support and help you in all the tough situations and in your worst fears. But inexperience can sometimes get the first-time investors into trouble, when they pair up with the wrong person or even for the wrong reasons. You don’t know people until you’ve worked with them.
So is it a must for a first-time entrepreneur to have a partner when starting up?
However great your idea seems to be, you need a team to turn your idea into a real business venture. While starting out alone may give you full control and autonomy over your company (that is if you do succeed initially), but having a partner just opens up the opportunity of a more dynamic approach. When you are partnering with someone, the risk of investment spreads, and even if your business doesn’t work out the way initially planned, it is not you alone who is tolerating the burden of losses. By selecting a partner with expertise in different areas, you are diversifying your options, broadening the scope of your business. Two different minds are more creative than one, increasing both the customer base, improving the product quality and even spreading out the workload. Sometimes the help of others delivers more than trying to do it all on your own. Having a partner definitely gives you courage to take up more challenges.
But, there are always risks partnering up with someone. While it may double up the starting capital and you can bring in the skills set you don’t possess, a startup partnership is like a marriage. You need to look for accountability, compassion and inspiration, so choosing a business partner is similar to choosing a life partner. Especially in the initial stages, when you are figuring out how the market works, you can’t afford to have a partner who is inconsistent, wasting resources. So instead of having a sloppy best friend as your partner, look at resumes and judge people by their logic and credibility. Look out for partner who isn’t good at dealing with the public. Having the right social skills to deal with the customers is important, because in future if your company does hit off, you can’t manage to impress the big players with an arrogant or careless attitude. Along with the clients, your partner should be able to treat the team members well. You don’t want a partner whom your employees hate. Ego and business don’t go along. When big decisions are to be made, one cannot decide without the other.
Suppose a situation, you and your friend decide to set up a business together. To be fair, both of you decide to own 50 percent of the company. That means, each of you would have 50 percent authority over the company assets, each of you equally share all the profits and losses. But do both the parties benefit equally, always? There are always inequities. 50-50 scenario doesn’t necessarily mean that each of them contribute equally to the company capital. Partner A may have supplied most of the capital, whereas Partner B may have provided the company with his/her business expertise instead of personal financial investment. It is not possible for both the partners to agree on all management related decisions. One partner may be too stubborn or greedy to accept the situation, causing conflicts. So is it really wise to get into a 50-50 partnership? Do unto others, but protect yourself. Think long and hard before making decisions. Make a list of the pros and cons that each contract brings. A 50-50 split may work, but you should have proper documents ready just in case it doesn’t. You can’t fulfill your desires without having to forsake anything. You can’t lose weight without having to give up on your junk food. You can’t get rich without working hard. A 50-50 business cannot work without understanding and agreeing on certain things even when you have contrasting views. You can’t make a marriage work without comprising on certain things.
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