Are you curious about the advantages of launching a business with a partner? Well, you've landed in the right place.
This article will walk you through the biggest advantages and benefits of a business partnership. We'll take a look at how a partnership:
- Widens your range of expertise
- Helps you to make better business decisions
- Increases efficiency through accountability
- Gives you moral support
Trust us; this guide has everything you need to get started.
Start your LLC the easy way
Forming your LLC is a checkbox that needs to be ticked. Easy, fast and worry-free. We reviewed the 13 most popular LLC formation services to figure out who truly understands what new founders need. Our recommendation:
We don’t make up scores.
Read our full review of Northwest
Best LLC Service 2022
- Formed 1,000,000+ LLCs
- $39 formation includes registered agent service
- Fast formation & same day filing
- Exceptional customer reviews
Share Expertise With Your Business Partner
One of the biggest advantages of a business partnership is that you gain access to a broader range of expertise. Your business partner should bring the experience and knowledge that you lack. They should also bring complementary skills that will help your business to grow.
Bridging knowledge gaps
You may be an expert at coming up with innovative ideas, but less effective when it comes to selling them. Maybe you're a tech wizard but know nothing about accounting.
Entering into a partnership is the perfect way to bridge these gaps. Businesses with one or more partners benefit from a higher level of expertise.
Your business partner's skills should be different but complementary to yours. It may seem easier to have a partner with the same proficiencies and experience. However, business partners with the same skill sets are unlikely to succeed in all areas.
For example, one partner may be excellent at building relationships. The other might be better at designing and building products. In partnership agreements, each partner can focus on their area of expertise.
A good partnership can make your business more efficient as you each engage in activities that you understand and enjoy. In contrast to other business structures, you and your partner won't be focusing on things you find tedious.
This makes you less likely to lose motivation. This is one of the reasons a partnership business can evolve and grow more quickly than other types of businesses.
Partnership Agreements Can Help You Make Better Decisions
When you run a business, it's very easy to develop blind spots which can affect your decision-making. Other partners bring a new way of seeing things that can help you to identify things that you may have missed.
Business partnerships give you a new perspective on the way you run your business. This can give you a different outlook on how you make decisions.
This can help you make better decisions about the markets you pursue, the people you deal with, and how you sell your services and products.
A business partnership can inspire you and help you see beyond the status quo. As a business owner, it's common to get stuck on certain decisions. This can make you feel powerless and unsure of how to proceed.
When two partners are involved in the decision-making process, you can draw on your experience and inspire each other to find innovative solutions. You can't put a price on inspiration!
Shared Accountability With Your Business Partner
Business partnerships allow accountability and labor to be shared. It also means that you hold each other accountable to high standards. This has many benefits, including increased productivity and the flexibility to seek out more business opportunities.
Sharing accountability and labor can greatly help to reduce opportunity costs. Opportunity costs are business opportunities or potential advantages that were missed while you were focused elsewhere.
When you have a partner to share responsibilities with, you will find that there's more time left to pursue other avenues.
Having a partner who is accountable also helps to lighten the load for you. It means you can take a step back when you need to and have a better work/life balance. This is another reason you must trust your partner fully – business partnerships only work when you both pull your weight.
Receive Support From Your Partner
A good partner will give you moral support when times are tough. They'll help you deal with setbacks at work and in your personal life. You'll be able to support each other with guidance and bounce ideas off each other.
There will also be times when celebrations are in order. This may be after landing a new client or increasing your sales. At these times, it's great to have someone to share the accomplishment with.
At Inc and Go, we're committed to helping you start your own successful business. If you'd like to learn more about the best ways to do this, then check out our other guides. We cover topics like starting your own LLC, outlooks on overworking, and much, much more.
Frequently Asked Questions
What is a limited liability partnership?
Limited liability partnerships are flexible tax and legal entities. They allow partners to work together while benefiting from economies of scale. They also reduce the liability each partner has for the other partner's actions.
If you're planning to form a limited partnership, you should check the laws in your state first. As with all legal entities, there are varying laws and regulations on limited liability partnerships in different states. The main benefits of these partnerships include:
- You and your partners have limited liability. So, if it fails, creditors can't go after your personal income or assets.
- The liability of each partner is limited to the amount of money they put into the business.
- Having a business partnership means sharing risk, labor, and profits.
Is it important to have a partnership agreement?
When forming a business partnership, there are no legal prerequisites; it can be as simple as a verbal agreement. It may form organically once you start acting as a joint venture.
However, it's always best to create a partnership agreement. This allows you to define the roles, responsibilities, and rights of each partner.
What are the disadvantages of a partnership?
There are many advantages and disadvantages to a partnership business. The advantages usually outweigh the disadvantages, however.
The main disadvantage is that if you've entered into a general partnership, you both have unlimited liability. In a general partnership, you and your partner are personally liable for company debts.