Will you be buying a franchise business on your own or sharing the process with a friend or spouse? Here are seven reasons why it pays to make the most of business opportunities with a partner.
Why should you go into business with a partner? It’s more fun, I think you would agree, to do most things in life with somebody else.
In business, as in life, there are some real benefits to having a partner along on the journey with you. Yes, I understand there are potential downsides too, but that’s a topic for another day. The focus here is on the positives that stem from having a business partner along for the ride.
Your business partner may contribute capital to help your financial position, they may have a great network of contacts to help your business grow, and they may have skills in areas that are not your strengths to balance out the team. Each and all of these can be compelling motivators to bring a partner on board.
So let’s look at seven ways that working with someone else will make your journey to owning and building a better franchise business easier…
1. Two heads are better than one
One of the challenges of starting and running your own business is that you are now responsible for all the major decisions. You’ve heard the saying “it’s lonely at the top”? Well, it can be even lonelier when you’re just starting out. Having someone to brainstorm with, share the thought process with and use as a sounding board is a real plus. Equally important, they can tell you when your ideas are not so great and help keep you on track.
2. A partnership is relatively easy to set up and administer
As far as business structures go, a partnership is not particularly complex from a legal or administrative perspective. This means your initial costs in setting up the arrangement are minimal and you won’t have to spend as much money on compliance and taxation related matters as you would do with a company and trust structures.
3. They know things you don’t
You have to wear a lot of hats in business these days. Whether your franchise is in food, is a mobile operation or provides professional services you need to be across your business plan, your vision, your team, your products, your finances, your reporting, your tax, your marketing, your safety… I’m sure you can add a few more to the list.
It’s rare for anyone to know everything needed to succeed in all of these areas of business. You might know a lot about the technicalities of your products, but not much about marketing. Your business partner on the other hand, may know quite a bit about marketing, and finances.
Complementary skill sets are one of the key benefits of a partnership. Your franchise partner can fill the gaps in your knowledge and that takes some of the pressure off.
4. They like doing the things you don’t
I love the sales process. I love meeting people; I love speaking in front of an audience. My business partner has a virtual meltdown at the thought of any of these things but likes developing systems, writing processes, looking after administration. I’m almost comatose just writing about those things.
So you see, we have different preferences for the things we like to do and the things we believe we are good at. Good partnerships work to each partner’s strengths, and work together on any remaining gaps. Utilising your passion and skills in the areas you enjoy not only leads to you being happier, but in my experience, it leads to a much more engaging and successful business.
5. They share the burden
Business is not always fun. There are times when things don’t go according to plan, and things just simply fail. Having someone to share that with, and who can pick you up off the floor occasionally is a good thing. And of course, you can reciprocate when they need picking up.
When you operate in a partnership, you can actually take a day off, maybe a weekend; maybe even take a holiday knowing that your business is being looked after by someone who has a genuine interest in making sure it succeeds! This alleviates one of the most common complaints from small business owners who feel trapped by their business: “I opened my caf_ for the lifestyle, but now I’m chained to this coffee machine!”
6. You can leverage your resources better
In most small businesses, the scarcest resources are money and time. In some respects, a partnership reduces the risk on each of the individuals involved when you need to go and find capital for your business. Instead of investing a million dollars, you might only need to invest half a million. This enables you to gear your finance at a much lower level and reduce the risk to your assets should things not go the way you plan.
Partnerships can be more effective from a taxation perspective as well. Having two people with their various companies, trusts and other structures (as a side note, get some good advice on how to structure your business) means that you can distribute income and minimise your tax commitments.
7. They keep you sane!
Finally, I recommend getting a partner with a sense of humour! Having someone around to make sure you don’t take yourself or some of the things in your business too seriously is just as important as getting everything done – sometimes even more so!