Partnership CONS

In addition to sharing profits and assets, a partnership also entails sharing any business losses, as well as responsibility for any debts, even if they are incurred by the other partner. This can place a burden on your personal finances and assets. Another downside of a partnership is loss of autonomy. While you likely enjoy being in total control of your business, in a partnership, you would now share control with a partner and important decisions would be made jointly. If you've worked on your own for a long time and are used to being independent, you may find it stressful when you can't continue to do things your own way.

A host of issues can surface that may make working with a partner difficult. For example, conflicts can arise from differences of opinion and relationships can sour. But you may be able to prevent emotional problems by carefully choosing who you partner with and looking for someone who shares in your vision.

As circumstances change in the future, you or your partner may wish to sell the business. This could present difficulties if one of the partners isn't interested in selling. You can deal with such an eventuality by including an exit strategy in the partnership agreement. For example, you may include "a right of first refusal" or many other issues such as a partner's bankruptcy, or desire to move out of the country.

While these cons are inherently present, most of them can be overcome with due diligence, proper investigation and a detailed, written, business contract.

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