Partnerships don’t have to be 50/50. A rule of thumb when determining partnership percentage is to weigh it based on the contributions of the partner(s). Does the investment (time, talent, treasure) of each partner warrant the percentage of equity? Many enter a seemingly 50/50 partnership, assuming the cost and responsibilities will be split equivalently but this is not always the case. There are times in partnerships where 50/50 is theoretical, not practical. Therefore, a partnership agreement is imperative. It will spell out the responsibilities and contributions of each partner (experience, skill set, investment, etc.).
A business that doesn’t start out as a partnership may at some point need a partner. Aspiring and current entrepreneurs should think about if or when their business would need a partner. For example, when expanding or starting a new venture a partnership may be necessary to offset the associated cost and responsibilities. A benefit of sole proprietorship is it allows for the experience of sole ownership, and for time to monitor business and determine the need, if any for a partnership. To help decide if and/or when to partner, outline circumstances and conditions in which a partnership will be needed or beneficial.
Partnering in business can allow for the contributions of skills, talents, funds and the sharing of responsibilities that propel a business into going and growing. In some cases, partnering is necessary to start a business, expand or keep a business operating. Entering a business partnership – required or desired, is not a decision that should be made lightly. Choosing to enter a business partnership should be a thought out informed process for all involved.