Should You Take on a Partner or Go Solo?
As you begin planning for your food service business, you will have a lot of decisions to make. One of the most important decisions is whether or not you should take on any partners and if so, how many. These partners will be others who invest, assume the risks, and take profit in the business together with you. It is a decision that you must make early on as funding your business is one of the first steps to getting started.
You will find that there are many advantages to taking on partners. You will have to endure a much lower upfront cost than if you would open on your own. Even if you take out some loans, you will not have the bulk of the debt on your shoulders. You can establish how much each person contributes and what their ownership will be. You will also not have to make all the decisions on your own or take all the risks by yourself. Your partners will assume part of those roles as well.
While there are many advantages to taking on partners, however, there are disadvantages as well. Although you may have dreamed of opening this establishment since your youth, taking on partners means that you will not have full control over it. The partners will have a say in the operations and in the decisions that have to be made. And, although everyone will have different personalities and preferences, it will be necessary to work together towards the same goal. In addition, you will not see the full profits, as they will be have to be split according to the initial agreement.
Who Makes a Good Partner
Only you can determine if having partners is the right decision for your business. If you opt to form a partnership it is important that you find the right partners. Not everyone makes a good business partner. Even friends may not work out. This is a business arrangement and the people you choose to work with should be those that you can rely on in business. There are a few things you want to consider as you choose your partners.
- Take the time to choose carefully. Do not let close friends or family ties make you select someone that would not work well in business. The people you select should understand business, be willing to work as you establish yourselves and have the ability to help with funding.
- Only select people that you trust fully. You are placing a lot of personal and professional risks on the line when you open a business. You do not want to do that if you cannot fully trust the people you choose to work with. You should make sure that they will be honest, fair and trustworthy.
- Set up a contract stating how everyone will contribute and what their ownership will be. This is something that needs to be established from the very beginning. You do not want to be surprised in the end with having to dish out more money than expected. Make sure you all agree on the arrangements.
- Ensure that your goals are the same. You may have different ideas about how to reach the goals so you want to work them out first. However, you should all have the same goals and visions in mind when it comes to major business matters.