Hi,
What are the advantages / disadvantages of having a business partner?
Mario
I take it from the lack of response it is not a good idea to have a business partner to invest in property.
there are a few things to take into account. the structure of the investments, is it a partnership? company? unit trust? etc etc.
what do both partners put into the business? time? money? both?But from reading books by steve etc, they are all big advocates of having a partner. i think you have to weigh it up. do you trust the person? do they have to same end goals as you? is the deal you have in mind fair to both partners? if you can find someone you can trust, who can fill the gaps in your own investing dream…. either cash time knowledge etc. then i think a partner is a great idea.
Maybe once you know how the whole system works, and you have your own money, a better business structure etc. you can go it alone. but partners can really help you get started i think.
Mario, another Pandora’s Box…. adding to illuminati's wise words….
I have had 3 business partners in my time.
First one was a disaster and cost me about 150k (dishonesty and too much trust on my behalf). See point 3 of negatives below
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Second one, after our initial success (due to point 1 in advantages below) partner went off on a power trip full of his own importance hence dissolved partnership (no losses here). He did go belly up a year after due to missing out on the benefits of point 1 below.Third and present one reaping the rewards due to all points in advantages below
Advantages of being in a partnership:
1. Two people working together have complementary skills, which can be very cost-effective as people specialise and become more efficient in certain aspects of their creative business. One partner might be good at selling work and presenting to clients, while another is better at bookkeeping
2. Two people know more than one. You have access to a wider pool of knowledge, skills and contacts
3. You can be at two places at the same time
4. Partnerships provide moral support and will allow for more creative brainstorms
5. You can share resources such as money and equipment
6. You need to be more organised than when you run your business solo, which often means that partnerships have better administration and financial systems in place than sole tradersOn the negative side:
1. A partnership is for the long term, and expectations and situations can change, which can lead to dramatic split ups. You might spend more time with your business partner than with anybody else, so losing that very intimate and personal business relationship can lead to major problems when splitting up
2. You have to consult your partner and negotiate more as you cannot take decisions by yourself. So you need to be more flexible
3. You both are responsible for the business debts and errors of others. So if the business fails and incurs debts, and your partner doesn’t pay his or her share, you will still be required to pay. This is even the case if debts were incurred by your partner’s dishonesty or mismanagement without your knowledge
4. You have to share your profits and decide on how you value each other’s time and skills. What happens if one person puts in 60 hours a week and the other one turns up late very regularly? What happens if one partner can put in less time due to personal circumstances, such as caring responsibilities or illness?.Hope that helps you
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