Pros & Cons of Business Partnerships: Sharing Burden or Splitting Differences?, Lecture notes of Business

Download Pros & Cons of Business Partnerships: Sharing Burden or Splitting Differences? and more Lecture notes Business in PDF only on Docsity! Forming a partnership: The pros and cons: The reasons for and against business partnerships If you’re debating whether to form a partnership to start your business then ensure you consider these advantages and disadvantages of business partnerships: Why collaborate? • Being able to share the burden. Partnerships give mutual support, companionship, and someone to share start-up problems with. • It can be stressful, lonely and frightening running a business alone. With someone else by your side, you can feel like you are in it together. • Having access to more skills, knowledge and experience. Partnerships provide for a wider skill base, complementary experience and know how. For example, one co-founder may have a technical background and the other financial, allowing the parties to complement each other. • Very few individuals have all the skills and knowledge needed to run a business successfully. Another person brings another set of skills, knowledge and experience. • Better and more effective decision-making can be had. A partner will bring different perspectives on any problems that arise. If often helps being able to see a different point of view. • Being able to look at problems from many angles can help to achieve better and often more creative solutions: more people means more perspectives. Why shouldn’t you collaborate? These are arguably the biggest disadvantages of collaboration: • Less autonomy; not being able to do your own thing and not always getting your own way. • Differences in personal aims and objectives for the firm. • Different views on personal rewards versus investment in the business. • Business owners have different views about their own future which may not be compatible and co-founders may differ in how they see the future of the firm; some may have ambitions for the business and want to build an empire, some may want a quieter life and prefer to look into an exit strategy. • Decision making can be slower as you have to win consensus. • Collaboration can mean that there is a loss of spontaneity.