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Welcome back everyone. In the sixth and final part of my blog series, I want to discuss something that affects all of our financial journeys: Superannuation. Perhaps you’re concerned about your retirement savings? Or maybe uncertain about how to make the most .....
Business - 4 min read
In business, partnerships can be good or bad, depending on the parties involved and their working relationship.
There’s certainly no one-size-fits-all answer to the question of whether or not a business partnership is right for you, but there are specific things you ought to consider as you make your decision. Let’s take a look at the pros and cons of business partnering. As you read through them, consider your own situation and how you will be affected by each one.
Start-up costs are one of the most challenging obstacles for new business owners, but when you go into the start-up as a partner, you divide these costs, thus reducing your overall risk. Of course, it’s important to agree to your terms in writing so there are no misunderstandings down the road regarding how much each person will contribute.
Shouldering the burden of a new business can be difficult. The responsibility and associated stress can be tremendous. When you have a partner, you can share this burden and fill in for one another when necessary. For example, it’s easier to go on holiday or take care of personal or family emergencies, assuming you have a good working relationship with your business partner.
Some of the most profitable business relationships occur among partners who have complementary skills. For example, if one partner has excellent technical skills and the other is a good salesperson, your teamwork will be powerful indeed. If you have very similar skillsets, your business partnership may not be as productive.
You and your business partner both have a personal network of friends, associates, former colleagues, and acquaintances. Together, you have a network that is possibly twice as big. This broadened network can be very helpful in many ways: marketing, hiring, contracting, etc.
With a new start-up, it’s easy to get discouraged, but when you have a partner, you can keep each other going. You have someone to report to and someone to celebrate with. You also have shared expectations that can keep you motivated when your energy is flagging.
It’s one thing to be responsible for your own actions, but it’s something else entirely to be responsible for your business partner’s. If your partner skips town, you’ll still be liable for debts incurred in behalf of both of you. Likewise, if your business partner says something offensive to a client, you may have to pick up the pieces.
Yes, you share expenses with your business partner, but you also share the profits. That bottom line might look pretty appealing - until you realise that you have to divide it in half. Be realistic about your earnings before you decide whether there’s enough to share.
When you run a business all by yourself you get to make all the decisions. You decide whom to hire, how much to charge, and when to plan events. If you’re very opinionated, you might have trouble sharing the control of your business, and this could lead to conflict. Be honest with yourself about how well you can share control. It’s better to have the difficult discussions early on than to risk a falling out later.
Friends often go into business together because they get along well and have similar interests. Some friendships are strong enough to weather the storms of running a business, but some aren’t. Realise that times may get tough, and try to separate your personal life from your business life as much as possible.
In the end, only you can decide whether or not business partnering is worth it for you. Be analytical in your decision making. Go through each of these pros and cons and consider how they will affect your business. Business partnering has the potential of being highly effective and productive when the partners work well together and the business can support two leaders.
Set your business on the right path with this simple guide.
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Business - 9 min read
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Altus Wealth Pty Limited ABN 55 649 956 212 is an Authorised Representative of Altus Financial Services Pty Ltd ABN 24 637 026 825 an Australian Financial Services Licensee (AFSL no. 520266). Altus Financial Services Pty Ltd is not responsible for the advice, products and services provided by Altus Accounting. Julie Azzi is a credit representative (CR No. 366834) of BLSSA Pty Ltd ABN 69 117 651 760 (Australian Credit Licence 391237).
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