The Rewards and Risks of Forming a Partnership

Millions of people co-own privately held companies, family businesses, and business partnerships, but establishing them–and keeping them together–is never easy. You might want to read this before you say "I do" to your next partner.

business partners’ success is tremendously important, not just to the individuals and companies involved but to the whole economy.

THE REWARDS AND RISKS OF FORMING A PARTNERSHIP
It can take an emotional toll on the partners, their spouses, and others close to them
Partnerships can strain a healthy relationship
There’s a risk of having a partner underperform, sometimes for extended periods of time
Buying out a partner’s interest can be costly
Losing a partner can mean a loss in revenue
Litigation after a breakup between partners can be costly

Advantages of having Partners
Your partner shares the burdens and responsibilities
Someone else can do jobs that don’t play to your strengths or interests
Partnership opens up opportunities that otherwise could be beyond your grasp, including greater success
You can move faster to take advantage of opportunities
You can enjoy camaraderie with an equal instead of feeling alone at the top
There’s the potential for synergy and better decision making at the very top of the company

From The Partnership Charter by David Gage (Basic Books). Copyright 2004 by David Gage. Reprinted with permission from the publisher.

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