Should you have a partner in business?

If you are a business owner in Georgia, or if your business is in the initial planning stages, you may be wondering whether or not having a partner is a good idea. Partnerships can work beneficially and be advantageous in many ways, but they can also be disastrous. The best thing is to weigh the pros and cons and make a decision based on your specific situation and needs.

The Chronicle discusses a number of benefits associated with partnerships. One advantage is tax-related. In a registered partnership the business itself it not taxed, so each partner pays taxes on their individual profits. The registration fees are also much lower than those for corporate designations. Other benefits include:

  • Improved chances of success and profit
  • Decreased financial responsibility
  • Lightened workload
  • More variety in terms of skills and experience

Inc. looks at the other side of partnerships and warns of some pitfalls if you do not choose the right partner. If you are a small business owner, it typically does not help to partner with other small businesses as the necessary resources are not there. You also should not get into a partnership that is unequal in terms of financial investment or other resources. Partners may have completely different skill sets, but their effort into the business should be equal. Other situations you should avoid include:

  • Partnerships with those who have a bad reputation and/or are deceptive
  • Partnering with someone who does not have a successful track record in business
  • Working with someone you do not trust
  • Exclusive relationships that do not allow you to grow or expand

 

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