A business can be called a partnership only when two or more people come together to start it and run it successfully. In some cases, it is a terrific success like Hero Honda but it might turn out to be a disaster if there is lack of coordination, cooperation and understanding between the two partners.
Advantages of partnership
Partners might make up for what is lacking
You might be brilliant at marketing but not have excellent leaderships. In that case, your partner can make up for what you lack. So, partnership with a person whose skills you are aware of and whose skills complement and supplement yours perfectly is a perfect choice.
Risk is distributed
The risk of the entire company doesn’t fall on one person. It is distributed equally amongst two or more people. so, the fear of taking major decisions isn’t very difficult anymore because you have another person to consult with.
Related Post: 6 tips for excelling as an entrepreneur
When you and partner start a business together, together you’re more likely to have more contacts than if just one person started the business. This extended network is absolutely important to find venture capitalists, angel investors, clients, customers etc.
Disadvantages of a partnership
Sharing authority and responsibility might be a problem
Often the common ground of understanding between entrepreneurs turns shaky which leads to problems between the two or more partners. This results in groupism and chaotic situations. Hence, sharing authority and responsibility might be an issue.
A partner might withdraw
Due to unfortunate situations; a partner might choose to withdraw from the company. This will result in the company’s morale being affected and the whole company leading to a failure due to a missing skill set.
Related Post: 5 reasons athletes make great entrepreneur
Conflicts of interest
Conflicts of interest between two or more partners is very harmful for the business as the fight might lead to the company’s interests taking a backseat and the situation becoming more chaotic. In prolonged situations, this might also lead to a company shutting down.
Image credit: www.zlien.com