I hear about new ventures aspiring entrepreneurs are taking on, frequently, but one thing I don't hear as often as I would expect is that people have business partners. A lot of time people want to start-up a company single-handedly- or at least being the only founder so they can take a bigger piece of the action, but I say people shouldn't fish alone. Working alone can only mean that you win big, if you win at all. Most of the time, I never work alone, because I at least have one other business partner involved with each venture.
There are plenty of pro's to working alone, but I want to discuss the how it can really hurt an entrepreneur if you start a company alone and there is nobody standing by your side. Of course you have to find the right partners to take on the venture with you, but when you do it is all worth it.
-Multiple brains- We all know two brains are better than one, so the same thing goes for taking on a new venture with more than one person. When you are starting up a company, you will always run into problems, but it is how you address those problems, which will put you on top or make you fail. Having another person that is part owner of the company will surely give you high quality input on what should be done to address each problem.
-They don't just work for you, they work with you- Often times I hear entrepreneurs say, "Oh, I'll just hire a few people, instead of having a partner," but that doesn't work the same as a true business partner. People who work for you, do just that, they work for you. People who are involved with a company at an ownership level, care more about the success of a company and will generally put forth more effort and time into the venture.
-You think something is flawless, but they don't- When I think something is great and one of my partners thinks it is absolutely worthless. It brings a chance for discussion to the table. Flagging a possible disaster before it may happen. When you have someone to "check your thinking" usually it can be nothing but good in the end.
-They have connections too- It might take you two months to do something, which they can get done in two days. Having another person taking on a business with you, will also bring their expertise and connections to the table. You can probably expedite more with their knowledge.
-The risk is spread out- The more stake they have, the less you are in for. Obviously, if the company does well, you will do better if you have more interest in the company, but if the company tanks, you only lose a certain part and don't have to face that bigger loss you would have faced, had you taken on the company alone.
-In crisis, it isn't as tough- When a company is facing trouble from more than one direction, it can be stressful on the owner. But if there is more than one owner, the stress is spread out and there is more confidence that you can pull through. All the business partners can sit down and discuss how to get the company out of trouble, instead of having to process everything single-handedly.
Some may argue upon the fact that you still win more, if you win. But it always comes down to more risk, more reward, but even so- I would rather have 50% of something than 100% of nothing.
For all entries on business partnerships click here.
Update: If you think that a future business partner might steal your idea, there are a few things you can do when seeking a partner and telling them about your idea.
1) Don't tell them the whole thing, just a rough sketch- While you don't want to keep them in the dark, you don't want to let them know each and every move, until they actually are a real partner and have brought something to the table themselves.
2) Sign a non-disclosure so they don't start telling the world about it.
3) If you can't trust who you are considering to be your partner, do you really think they should be your partner?
