Working in a partnership is one of the most powerful ways to grow your business. A partnership can provide access to resources and expertise that you don’t have on your own, as well as allow you to share responsibilities so that neither partner has too much work. Partnerships can also add to the professional success of both partners; one partner’s recognition will reflect onto the other. This means, with a successful partnership, both partners will become more influential in the business community as well. Before going into a business one with another, it is important to be aware of the general partnership advantages and disadvantages.
Advantages of a General Partnership:
Resources: Partners provide extra resources that a business may not have on its own. For example, if one partner is an accountant who specializes in accounting for nonprofits and you are a psychologist who focuses on counseling children of special needs parents, then the two of you together would be able to provide services that neither of you could do by yourself. Resources like this benefit your clients and make them feel as though they are receiving more personal care than they may have received otherwise.
Expertise: When you add another person to your business, it opens up avenues for new expertise that you cannot acquire on your own. For example, if one partner is an experienced social media manager and the other has experience with financial accounts, then together they can expand their knowledge of social media management, and the partners can together manage your company’s finances. This allows for both partners to grow professionally, which will make it easier for them to find new clients in their respective fields.
Downside Protection: If something were to happen in one partner’s life that would prevent him or her from continuing to work, such as a death or serious illness, the other partner would be able to pick up the slack in the absence of their friend or family.
Joint Marketing: When you work with another person in your business, it gives you an opportunity to form joint marketing activities. For example, if two people who run a bakery join forces, they could have an event at the bakery and then market it in order to gather more clientele.
Accountability: When you form a partnership, it adds to the accountability for both partners. For example, if one partner is struggling with keeping up their work because they are lazy or disorganized, then their partner will have to hold them more accountable in order to make sure that they are performing their duties in a satisfactory manner.
Disadvantages of a General Partnership:
Disputes: If there are disputes that cannot be resolved, it can lead to the end of a partnership. For example, if one partner flat out refuses to follow through with an agreement they have made and will not compromise on their opinion about the matter, then the two partners may have to part ways.
Unequal Power: If the partnership is not balanced, then it can lead to issues with one partner becoming overwhelmed and eventually depleting their happiness. For example, if one partner handles all of the financial aspects to the business while another does not handle any of them and instead focuses on ensuring that all of the employees are adhering to company policies, then they will be unhappy because they will feel as though their job is not valued.
Inequality of Contributions: If the contributions between partners are unequal, then it can create tension in the relationship. For example, if one partner handles all of the administrative works for the business and another does not contribute any of his or her time to help run anything related to the business, then it may cause the second partner to be unhappy and feel as though they are not being valued.
Expanded Liability: If they should fall into a legal dispute or any other issue comes up with your business, both partners are equally responsible for what happens, which means that one person’s mistake could lead to the end of one’s business.
Risk: It may be necessary to hire a lawyer when you go through a partnership agreement, and this can cost quite a bit of money. While this is not always the case, it is something that should be kept in mind before making any decisions about starting up a company with someone else.
If you are considering a partnership, it is important to be aware of the potential benefits and disadvantages. We hope that this blog post has helped you learn about some of the advantages and disadvantages of forming a general partnership so that you can make an informed decision when selecting your business partner.
Vivan Henderson, a professional photographer born in Texas. Photography is his passion. He was fond of nature in his childhood. So he took his passion as a profession. He is basically nature photographer but also take other type of photo. He completed graduation in computer science from Texas Tech University. He lives in Houston with his wife and two children’s.