Pros and Cons of Business Partnership

Starting a business is a big and exciting decision, and one of the key decisions entrepreneurs have is whether to do it alone or partner with others. A business partnership can offer several advantages, but it also has potential disadvantages and should be carefully considered. Here’s a balanced look at some pros and cons to help you make an informed decision.

Pros

Shared resources and expertise is one of the most significant advantages of a partnership. The ability to have different thought processes, networking groups, and backgrounds is huge when the time comes that you want to be personable and relatable to customers. It can also offer greater financial and intellectual support than you might have on your own. Running a business involves a great deal of responsibility and accountability, from managing daily operations to making important financial decisions. Through partnership, this is shared. This division of labor can reduce stress and make it easier to stay on top of everything that needs to be done. Partners can divide tasks based on their strengths and take turns working on the business and/or in the business.

Partnerships can afford the business a stronger financial position. Although borrowing power may be greater as well, the two or more should focus on a potential partner’s individual net worth first and foremost. Remember that when entering a legal partnership, one is essentially marrying in a financial sense. With two or more savings accounts, streams of income, and set of assets, that could make all the difference. Relationships are our biggest asset as humans for everything we’ll ever want and need. The more reach an individual has, the better off the business will be. Think about your geographic location, your economical background, your sphere of influence, and all the people you have connections with..now think about someone else bringing that same value if not more! That truly is powerful. 

Cons

One of the biggest disadvantages of a partnership is the potential for unresolved conflict. Conflict is inevitable and something that is bound to happen yet with two people comes two different minds. Partners may have differing visions, work styles, and/or opinions on business decisions. These disagreements can lead to tension. It’s crucial to have open communication and clearly defined roles to prevent misunderstandings. Be sure you and your partner are aligned where it matters because if not, it could create a huge…conflict.

In many partnership structures, partners are personally liable for the business’s debts and obligations. If the business faces legal issues or financial difficulties, your personal assets could be at risk. While a limited liability partnership (LLP) can help mitigate this risk, it’s still a potential downside for those entering into a general partnership.

While having multiple partners can improve decision-making, it can also lead to delays in decisions being made. If partners cannot agree on a course of action, have the same availability for a meeting or have different priorities,  it can take longer to make critical decisions. This can slow down the growth of the business, particularly in situations that require quick action. Most of the time the delays can result in ripple effects over time.  

A business partnership can offer many benefits, including shared expertise, financial resources, and responsibilities. However, it’s important to weigh these advantages against the potential risks as mentioned. If all partners bring complementary skills to the table and work well together, a partnership can be a rewarding and successful business model.

Should I Start a Business While Receiving a W2?

The big question many people ask is: Should I start a side hustle? More specifically, should you start one while working a full-time W-2 job, dedicating most of your time to someone else’s business rather than building your own? If you feel driven to start your own business, we believe you can—and should—pursue it! Remember, becoming self-employed and/or a business owner isn’t for everyone. If it’s right for you, make sure you’re not just starting any business. It should be something you're passionate about, something you either have expertise in or are willing to develop, and something you can build while still respecting your obligations to your current employer. Let us lay out some practical steps for what that may look like.

You’ve identified the industry you want your business to be in. Setting aside the legal and financial questions, one thing we want you to ask yourself is whether you have the time. Many people want to do many things, yet only certain people can do one thing well. Much of this comes down to time management. You work a forty-hour workweek, and whether that’s traditional or three twelve-hour shifts (actually being 36), can you set aside ten hours to dedicate to your side hustle? We recommend starting with ten hours of work because it's digestible and obtainable. If you bake cakes, strive for however many cakes are needed to keep you in the kitchen for ten hours that week. If you value bookkeeping, make it a goal to get to know QuickBooks intimately while also getting paid for it. For my folks who love working in the trades, how many service calls will you need to justify ten hours' worth of work? Start there.

Now, let’s say you exceed ten hours in your side business yet you're definitely not near forty. Feel like you’re stuck between a rock and a hard place? Communicate. Not with your job, but with your customers. You can take on those extra hours that week, yet you know it’s not sustainable to do that every time. Not yet. The reason for communication is to help them manage their expectations when it comes to your business. By letting them know that you still have a traditional job and prior obligations, some won’t want to hear that, but most will understand and work with you. You just need to be great at what you do. Slowly increase your workload, hours, client list (however you want to label it), and manage that tension in a healthy manner.

Making money steadily every week now? Now it’s time to compare paychecks. There’s more to it than just looking at the dollar amounts though. Pay attention to opportunity costs as well. Finances are a huge metric, yet dare we say it may not be the most important when it comes to working your life away? Practically speaking, in a weeks’ time, you’re making $500 in profit and $1,500 from your full-time job. Ten hours equal $500, so will forty hours equal $2,000? Think about it like that if you’re wanting to justify it through numbers. If the numbers don’t meet or exceed your full-time pay, should you still walk away? Some people say no automatically, while others are conflicted. To help with that conflict, think about the opportunity cost.

Opportunity cost can include questions such as: Will I be okay without insurance? Can I afford to give more time to this business? Do I have the savings to sustain me during a slow week or month? Will leaving my job hinder me? Am I okay with pausing my retirement until I become financially stable in my business? Should I have any additional training or education before becoming my own boss? Am I leaving my full-time job on bad terms? Will I lose healthy relationships?

We want you to ask yourself these questions before moving forward with the process. This is just the beginning. Check out some of our other posts and read about how we help solopreneurs rationalize how to go about starting a business in specific areas.

Borrowing Money vs. Creating Capital

The financial choices you make early on can set the tone for long-term success. One of the most important decisions is whether to borrow money or build equity through sustainable practices. Here’s why we believe that you shouldn’t borrow money and should instead grow your business at the speed of cash. The only exception? Real estate—if absolutely necessary. When you borrow money, you’re no longer fully in control of your business. You're working to pay off lenders, which means your focus shifts from building your brand to meeting someone else’s demands. Subconsciously (and maybe even consciously), this changes the way you run things. You're no longer building for yourself and your clients—you’re building to make enough money to pay back what you borrowed.

Think about it. Have you ever had someone ask you for money? How did that make you feel? Probably awkward, anxious, or even a bit put off. Then, when they tell you what they need the money for—whether it’s paying a medical bill or starting a business—how did you feel? Most people would say, "If you believe in your idea so much, why not use your own money?" That’s exactly the point. If you believe in your business, invest your own money in it. Don’t strain or risk relationships just to borrow from someone else. Banks make money by lending, and they don’t have the same emotional connection that you or your loved ones do. Borrowing money within personal relationships is where the real damage happens—especially when things don’t work out and you have no way to repay. 

Sometimes, hearing "no" isn’t a challenge you need to push through. It’s a protection mechanism. It’s about timing, and timing is everything in business. When you understand the importance of timing, you become more aware of how vulnerable you can be in all areas of your life, especially in finances. Instead of rushing into debt or borrowing money, take the time to understand your financial situation, and learn how to steward your money wisely. This is a lesson that applies not only to your business but also to your overall financial well-being.

The key to growing your business without borrowing money? Creating capital. There are a few ways to do this, but let’s focus on two main strategies: reinvesting business earnings and saving money. Reinvesting your business earnings is a surefire way to grow your business without taking on debt. After covering your business expenses, set aside a portion of your profits to fund future growth. This could be for marketing, new equipment, or hiring staff. It won’t happen overnight, but with intentional effort, you’ll be able to build a strong foundation. The important part is being strategic with how you use those funds to further grow your business. Saving money is another powerful way to fund your business without borrowing. It might take time to save up enough capital for a big project, but this gives you the freedom to make decisions based on opportunity, not necessity. Plus, when you save, you become more intentional about how you spend your money, which leads to smarter, more sustainable decisions.

The biggest challenge with reinvesting and saving is that it takes time and patience. In a world of instant gratification, it’s easy to get caught up in the pressure to grow quickly. What’s true about a turtle and a rabbit? They are both still moving. Through saving and reinvesting, you learn to appreciate your business more, and you avoid making hasty, irrational decisions with money. There is one exception to the “don’t borrow” rule: real estate. If you’re looking to purchase property for your business, borrowing money might be necessary. Real estate can be a solid investment for business growth, but it should still be approached with caution. If you do borrow, make sure it’s part of a long-term, well-thought-out plan. Starting and growing a business without borrowing money is challenging, but it’s absolutely possible. By focusing on reinvesting and saving, you can grow your business at your own pace, without the pressure of paying off debt. It takes patience, discipline, and a willingness to play the long game. In the end, it’s a great way to ensure success.

Maintenance Mode vs. Growth Mode

Think about a time when you worked in an organization that was always chasing the next thing, everyone was on the go, business meetings went over new metrics and financial goals to meet and surpass for that quarter, etc. Would you say that business was in growth mode? What about an organization that is focused on process improvement, building the team and not the client list, meeting customers' needs to the best of their ability and emphasizing quality over quantity. Would you say that business is in maintenance mode? Could they be in both modes at the same time? 

For a solopreneur and startup, growth mode is essential to survive. Revenue, customer base, and brand awareness are some of the main objectives. Without going through this, a business won’t have the opportunity to ever enter into maintenance mode. Once established, the business may transition into maintenance mode to refine processes, strategies, and team dynamics. This shift allows the leader(s) of the organization to reset priorities, improve methods, take care of people, and prepare for the next phase of growth. When growth mode resumes, the business is more stable internally, better structured, and has a team that knows they are cared for. 

As mentioned before, timing is crucial and here are some reasons why: growth can easily turn into greed. As a business owner, we can become so fixated on income that we forget the art of serving. When we take a step back and switch modes, it allows for perspective to be realigned, for opportunities to reset. With rapid growth comes the risk of lack of sustainability. Strained resources can lead to operational inefficiencies which will create a poor customer experience. When not using timing to switch between the two modes, a business might stray from its core values and/or mission. This can alienate loyal customers and employees, affecting the business's reputation and internal culture.

The key to long-term success is knowing when to shift between these two modes. Finding the right balance will help you sustain growth while maintaining quality and efficiency. Whether you’re just starting or scaling to the next level, be mindful of where your business stands and make strategic decisions based on your goals. The ability to move between growth and maintenance mode will ensure your business not only survives but thrives.

Working On vs. Working In

Have you ever eaten at Chick-fil-A? Ever noticed the operator serving at the drive-thru, wiping down tables, or gathering extra sauces? The operator isn’t just working on the business but also working in it—showing humility and servant leadership.

As a solopreneur, knowing when to focus on the day-to-day operations (working in) versus the strategic growth of your business (working on) is crucial. The balance between these two can help you scale effectively, but it’s easy to get stuck in one area and neglect the other. For solopreneurs, you’ll need to work both in and on your business and understanding when to shift focus is key to growth. Timing is everything and knowing when to step back from daily tasks to focus on your business’s bigger picture is needed. In the early stages of your business, most of your time will be spent working in the business—fulfilling orders, serving customers, selling products, etc. It’s about building a solid foundation and serving the customers you have right in front of you. Don’t neglect the business you already have. Word of mouth will do a lot of the marketing for you, and keeping your current customers happy is your most valuable tool for organic growth.

This doesn’t mean you shouldn’t work on your business—just that you’ll do it during the time you have outside of serving clients. Whether it’s after hours or on weekends, this is when you can focus on vision, marketing, and goals. Some ways to manage your time between working in and on the business:

Track Your Time: Start by realizing how you spend your time. Are you spending too much of it on customer service or fulfillment? Is your business growth taking a backseat? Tracking gives you a clear picture of where your energy is going and helps you make adjustments accordingly.

Set Clear Goals: Be clear about where you want your business to go. Do you need more customers? Do you need to build more systems to streamline your work? Setting specific goals for both daily operations and long-term growth will help you balance both sides effectively.

Evaluate Your Capacity: Look at your current workload and resources. If you’re at capacity, it may be time to outsource, automate, hire help, or simply slow down. This allows you to step back from the operational side and focus more on growth activities. Once you’re ready to scale, delegate tasks that don’t require your direct involvement. Example being to outsource customer support, automate social media posts, or bring on contractors to help with repetitive tasks. This will free up your time and may still put some money in your pocket.

Recognize when your business needs you in different roles. Early on, focus on getting your product or service right and ensuring your customers are satisfied. As you grow, spend more time building the systems that will support scaling—whether that's hiring, marketing, or refining processes. Don’t let the daily grind consume all of your time. The goal is to transition from working in the business to working on it when the business is ready. Then you’ll create the opportunity for both to be done on your time.