Forming a partnership: The pros and cons
We examine the reasons for and against partnerships
These are the advantages of collaboration given by almost all of the 106 co-owners in the East Anglian study:
- Being able to share the burden. Partnerships give mutual support, companionship,and someone to share the problems
- It can be stressful, lonely and frightening running a business alone.With someone else, 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 ho. For example, him technical – me financial
- 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, more effective decision-making. A partner will bring different perspectives on problems. If often helps being able to see different points of view
- Being able to look at problems from many angles can help to achieve better often more creative solutions: more people means more perspectives
Why shouldn’t you collaborate?
These were the most important disadvantages of collaboration seen by the co-owners:
- Less autonomy
- That is, not being able to do your own thing and not always getting your own way
- Sharing ownership does mean that you can’t always do what you want
- Differences in personal aims and objectives for the firm
- Different views on personal rewards versus investment in the business
- People have different views about their own future which may not be compatible
- People differ in how they see the future of the firm; some are ambitious for their firm and want to build an empire, some want a quieter life.
- Decision making can be slower
- Having to win consensus often slows decision making.
- Collaboration often means that the cost of a wider perspective on problems is a loss of spontaneity
Other disadvantages mentioned included:
- The distraction and cost of handling conflict between co-owners
- Resentment when reward is not seen as fairly matched by effort