Starting a business and running it requires a lot of financial, physical and moral costs, and this process is also associated with numerous risks. That is why many businessmen are thinking about finding business partners. This article discusses the essence of a business organized jointly, its pros and cons.
Theory
Any entrepreneur at the very beginning of his journey always needs funds, as well as additional assistance. Many of the novice entrepreneurs resort to the possibility of connecting additional owners to their business, regardless of the idea of a joint business. Most often these are friends, relatives and other close people, but sometimes businessmen attract people from outside. This happens in cases where you need not just financial assistance, but experience and skills in a certain area.
pros
Among the advantages of joint business, one can single out the division of labor and the combination of financial opportunities. Even in a small business, an entrepreneur has a lot of different problems and issues that need to be addressed, sometimes there is not enough time and energy for everything, and you need a person who is also interested in developing a business, like you yourself. An additional advantage is the skills and experience of a business partner, as well as fresh innovative ideas. In the Russian Federation, one of the important points that should be given special attention is communication. The emergence of a companion for joint business in your business will allow you to gain additional connections and acquaintances.
Minuses
At the very beginning of your entrepreneurial journey, most likely, all your profits will be returned back to your business. At this stage, it seems to many businessmen that the business does not bring any benefit, and also that the partner works worse than he does and invests less effort, money and time. It is at the initial stage that the business most often breaks up.
Partner selection
The most important element in finding a partner for a business is the quality of the relationship. In half the cases, the reason for terminating the general business is the wrong choice of partner. Many people select co-owners by family or friendship. However, when it comes to money, it often turns out that friendship is not strong enough, and family relations can be destroyed in the first debate on any issue. In business, the business acumen and interest of a partner is no less important than trust, on the basis of which we make a choice in favor of relatives. If you have already decided on the need for a partner for your business, you must determine the qualities that your future co-owner should possess. It is important to take into account both character traits and knowledge, as well as possible material investments of the partner.
Split shares
In organizing a joint business, you must immediately identify the partners' shares in responsibilities, as well as in making a profit. These are very important questions and so that disagreements do not come up in a later period. To do this, they need to be discussed at the very initial stage. Most often, the business is divided in half. However, there must always be a leading owner in the business. In the case of a 50/50 division in the process of activity, disagreements may arise on the further development path, which cannot be resolved, since each owner has the same rights to this company.
Attachments
In any type of business, investments are always required. When doing business with a partner, it is always important to clarify how much money everyone is willing to invest. Otherwise, a situation may arise in which one of the partners invested much more than the other, and the profit is divided equally.
Where and how to find a partner?
You can search for a partner among your acquaintances and friends. Surely among your environment there are people with similar interests who are interested in your idea and who are ready to support your endeavors. You can also find a suitable ally in various forums and conferences according to your field of activity. Today, a lot of business conferences are held, both online and in real time. At such meetings, various training seminars and trainings are held, during which there is communication between the participants. The most positive thing about this option is that you can find a partner among more experienced participants, and possibly even among teachers. In the age of information technology, the option of searching for colleagues via the Internet has become possible. Now there are many specialized portals for finding a partner for a joint business. Some entrepreneurs find participants even on bulletin boards.
Organization
First of all, to organize a joint business, you and your future partner need to discuss all the main points and ideas for your business. It is very important that your understanding of your future venture coincides with your colleague. Otherwise, even if at the beginning of your journey your interests coincide, at the end they will diverge anyway. It is also important to consider whether you are creating a business from scratch or a business that is already ready, and the second participant simply buys a share. The distribution of interests and responsibilities of each of the owners depends on this.
Organization Form
When creating a business, all entrepreneurs are faced with the choice of the organizational form in which it will exist. When conducting joint activities, businessmen most often choose the form of IP or LLC.
The choice of IP is due to the ease of execution, as well as accounting and taxation. But at the same time, the entire enterprise is documented for one person, and the second is the unofficial owner. This option is not very practical, due to the fact that the second owner does not have any documentary rights to the business and is built only on full trust. In case of disagreement or any questions regarding the further movement of the business, one partner has a great advantage over the second, and in case of dishonest relations, he can simply “throw” the partner and take the entire business into sole ownership.
In the case of an LLC, an enterprise is formed with the participation of both partners, and their shares and rights are distributed by agreement. This option is the most acceptable, since in this case the rights of both participants in the joint business are protected. Another advantage of the LLC organization is the completely transparent financial system for any participant, which is especially important if there are more than two of them. Among the shortcomings of this form, one can single out the complexity of maintaining an accounting system and the complexity in design.
Total
In modern business, it is quite difficult to survive alone. A competent and reliable partner who will take on part of the responsibilities and risks present in any field will help you not only maintain your business, but also give an additional impetus to development. But you need to remember the basic tips for finding and organizing joint ventures, as well as the basic rules of business.