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Home Finances

Which is preferable: Launching a business alone or with a partner?

1 year ago
in Finances
Reading Time: 3 mins read
Which is preferable: Launching a business alone or with a partner?
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# Deciding Between Starting a Business Solo or with a Partner: Pros and Cons

As a first-time entrepreneur, the decision to start a new business solo or with a partner is a big one. While many entrepreneurs manage all the hard work of starting and running a business alone, it’s important to consider the benefits and drawbacks of each option. Here, we’ll examine the pros and cons of both scenarios to help you make an informed decision.

## Pros and Cons of Starting a Business Solo

**Pros**
– A [sole proprietorship](https://www.allbusiness.com/should-you-incorporate-as-a-sole-proprietor-or-llc-116676-1.html) is the simplest organizational structure.
– There won’t be conflicts about business decisions.
– You are indisputably the source of your own success.

**Cons**
– You need to do it all, even though you’re not expert at everything.
– You can’t go on vacation without shutting down the business. Or you use technology to take business along on your vacation.
– The greatest potential problem? You have no sounding board for your ideas, and nobody to provide a second opinion.

## Pros and Cons of Starting a Business with a Partner

**Pros**
– More heads are better than one. [Professor Ed Roberts of MIT Sloan School](https://mitsloan.mit.edu/faculty/directory/edward-roberts) found in a study that the probability of success increases with team size up to four or five entrepreneurs.
– Partner(s) contribution to startup capital allows you to scale up your business sooner.
– Chances are better that you’ll have the right talent for all facets of the business.

**Cons**
– Decision-making is difficult if the partners are of different minds; conflicts will invariably arise.
– You need to choose a suitable organization structure to meet the needs of all partners. Will some be limited partners?
– An exit strategy is much more complicated, and at the same time is more necessary.

When starting a business with a partner, it’s important to look for someone who complements your shortcomings with corresponding strengths, shares your values, and is respectful of your opinions. Partners need to share your belief that the business idea has legs and be willing to invest time and money proportional to their share of the business.

## Business Partnership Alternatives

A third alternative is to enter into business partnerships in which another business takes on an aspect of your business that isn’t your strong suit, but maintains their own business identity. Are you too small to get the geographic reach it will take to achieve a viable scale? A distribution partner can be the answer. Or perhaps your expertise is in sales and [marketing](https://www.allbusiness.com/sales-marketing-173-1.html), but you don’t have manufacturing experience. A manufacturing partner can be a solution.

Whatever you decide, ensure that if you take on a business partner, it’s done with a detailed, viable agreement that spells out each person’s share of the ownership, how profits and losses will be allocated, and identifies roles, responsibilities, and time commitments of each partner. The agreement should consider how disputes will be resolved and clearly define how assets, liabilities, and expenses will be distributed if the partnership must be dissolved for any reason.

For those considering starting a business, the decision to go solo or with a partner is a critical one that will shape the trajectory of your business. Consider the pros and cons of each option and choose the path that aligns best with your goals and vision for the future.

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