Free Essay: Pros and cons of Partnership in Business
Partnerships in business have brought forth some of the biggest giants in economic history. Before any individual or group of people set up business, they must think about what kind of a structure the business is going to have. When there are a number of people interested in the business the most obvious consideration would be to come up with a partnership. This essay will look at some of the Pros and cons of Partnership in Business.
There are different types of partnerships that one can consider including: a general partnership, limited liability partnership and a limited partnership. Each one of these partnership has its advantages and disadvantages that are important to consider.
Pros of partnership in business
The most obvious advantage is that getting into a partnership means that you will have more hands to do the work. Work will be lighter when it is delegated. It is easier for several people with a similar vision to carry out various tasks. This will definitely improve production and profit levels of the company.
When people come together they combine their financial muscle. It is therefore easier to come up with the capital you need to set up a business when you are working with others unlike when you are working all alone. You may have member with better credit ratings than your own who will make it easy for you to get money from financial institutions.
Partnerships do not involve only the coming together of financial resources. The members will combine their skills and expertise. Two brains are always better than one. When an individual sets up business by him or herself, he or she will need to hire people to meet the various responsibilities. However, if the partnership is made up of professionals possessing different skills, they will be able to play an important role at no extra costs to the company or organization.
Having a partnership means that you have a reliable individual or group of people that always have your back. Other responsibilities in life do not have to stop the running of the business. For example, when a member has to take a paternity or maternity leave, they feel confident because they have an able person to handle business while they were away.
The cons of partnership in business
One of the greatest challenges is having to compromise when it comes to decision making. Unlike in a scenario where you are the sole proprietor, in a partnership you will not always have your way. All decisions have to go through a process of deliberation and sometimes a lot of bureaucracy will be involved especially in a corporation.
A partnership involves putting resources together to set up a business. Therefore, when the profits are realized, you must share. Different companies have unique policies regarding how the profits are shared. The bottom line however is that you do not get to enjoy the profits as an individual but you must share as a group.
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