Disadvantages of Working with a Business Partner
Houston Growth Strategies for Small Business
1. Different Work Ethics. - Many entrepreneurs find themselves working with partners who don’t share their enthusiasm or passion for business.
Partners who can’t meet deadlines, follow up with clients, or follow through with their responsibilities can bankrupt an established business or a new business venture.
2. Lack of Experience. - Some business partners don’t have the experience or skills to do their job successfully. When working with a business partner, you need to count on your partner to deliver results. Working with a business partner who can’t deliver can lead to many disasters down the road, including poorly designed products, angry customers, and potential lawsuits.
3. Disagreement on Direction. - A poor choice of a business partner causes major problems for any business. Sometimes, even working with a motivated, talented, and brilliant partner also causes problems. Business partners may disagree on the long-term goals for the company. They may spend weeks or months bickering over key decisions. Disagreements between partners may consume resources, cause stress to other employees or lead to inconsistent business practices.
4. Sharing Profits. - When you have a business partner, you have to split the profits. Entrepreneurs happily share profits with partners when they bring additional value to the firm. If your partner does not increase business enough to justify their involvement, however, they shouldn’t receive a share of the profits. If you make the same amount of money with a partner as you do without a partner, you may have selected the wrong person to help you run your business.
5. Complicated Relationships. - When people go into business with someone close to them, they risk damaging the relationship. Business partners often have differences in opinions. Sometimes, those disagreements can lead to serious misunderstandings. Because of this, a bad business partnership can devastate a relationship when the partner is a friend, spouse, or family member.
6. Liability for Your Partner’s Actions. - You take responsibility for whatever happens in your business. If your partner violates any laws, you may end up in court, too. This can lead to a fine for violating government regulations, a lawsuit in the case of a civil tort or if you are found liable for damages, or possible imprisonment in the event your partner commits a criminal act.
7. Your Reputation on the Line. - Even if your partner doesn’t break the law, his or her actions may come back to haunt you. A shady or dishonest partner may lead to widespread distrust of your company. This may permanently damage your reputation. People align you and your partner with your business, and the company you keep while building business relationships may negatively reflect upon the reputation of your business.
Source: moneycrashers
Patty Block, President and Founder of The Block Group, established her company to advocate for women-owned businesses, helping them position their companies for strategic growth. Charting the course for impactful, sustainable, profitable businesses, the beacon is control: of your strategic direction, your money, your time, your staffing, and your ability to bring in business. The Block Group brings together the people, resources and ideas that build results.
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