Joint business: advantages and disadvantages. Business rules

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Starting and running a business requires a lot of financial, physical and moral costs, and this process is associated with numerous risks. That is why many businessmen are thinking about finding business partners. This article discusses the essence of a business organized jointly, its pros and cons.

Theory

Any entrepreneur at the very beginning of his journey always needs funds, as well as additional help. Many of the start-up entrepreneurs resort to the possibility of connecting additional owners to their business, regardless of the idea of \u200b\u200ba joint business. Most often these are friends, relatives and other close people, but sometimes businessmen attract people from outside. This happens in cases where you need not just financial assistance, but experience and skills in a certain area.

Pros

Among the advantages of a joint business are the division of labor and the combination of financial opportunities. Even in a small business, an entrepreneur has a lot of different problems and issues that need to be addressed, sometimes there is not enough time and energy for everything.enough, and you need a person who is just as interested in business development as you are. An additional plus is the skills and experience of a business partner, as well as fresh non-standard ideas. In the Russian Federation, one of the important points that should be given special attention is communications. The appearance of a partner for joint business in your business will allow you to gain additional connections and acquaintances.

Cons

At the very beginning of your entrepreneurial journey, most likely, all your profits will return back to your business. At this stage, it seems to many businessmen that the business does not bring any benefit, and also that the partner works worse than he does and invests less effort, money and time. It is at the initial stage that a business most often breaks up.

Choosing a partner

The most important element in finding a business partner is the quality of the relationship. In half of the cases, the reason for the termination of a common business is the wrong choice of partner. Many people select co-owners on the basis of family or friendship. However, when it comes to money, it often turns out that friendship is not strong enough, and family relationships can collapse at the first disputes on any issue. In business, business acumen and the interest of a partner are no less important than trust, on the basis of which we make a choice in favor of relatives. If you have already decided on the need for a partner for your business, you must determine the qualities that your future co-owner should have. It is important to take into account how featurescharacter and knowledge, as well as possible material investments of the partner.

Split shares

In organizing a joint business, it is necessary to immediately indicate the partners' shares in responsibilities, as well as in making a profit. These are very important questions and so that disagreements do not surface at a later period. To do this, they need to be discussed at the very initial stage. Most often, the business is divided in half. However, a business must always have a lead owner. In the case of a 50/50 division in the process of activity, disagreements may arise on the further development path that cannot be resolved, since each owner has the same rights to this company.

Attachments

In any kind of business, investments are always required. When doing business with a partner, it is always important to clarify how much money each is willing to invest. Otherwise, a situation may turn out in which one of the partners has invested much more than the other, and the profit is divided equally.

Where and how to find a partner?

You can search for a partner among your acquaintances and friends. Surely among your environment there are people with similar interests who will be interested in your idea and who are ready to support your endeavors. You can also find a suitable colleague for yourself in various forums and conferences, according to your field of activity. Today, a lot of business conferences are held, both online and in real time. At such meetings, various training seminars and trainings are held, during which communication takes place.between participants. The best thing about this option is that you can find a partner among more experienced participants, and perhaps even among teachers. In the age of information technology, it has become possible to search for colleagues via the Internet. Now there are many specialized portals for finding a partner for a joint business. Some entrepreneurs even find members on bulletin boards.

Organization

First of all, in order to organize a joint business, you and your future partner need to discuss all the main points and ideas for your business. It is very important that the understanding of your future enterprise coincides with that of a colleague. Otherwise, even if at the beginning of your journey your interests coincide, at the end they will still diverge. It is also important to consider whether you are creating a business from scratch or a ready-made business, and the second participant simply buys out the share. The distribution of shares and responsibilities of each of the owners depends on this.

Form of organization

When creating a business, all entrepreneurs are faced with the choice of the organizational form in which it will exist. When conducting joint activities, businessmen most often choose the form of an individual entrepreneur or LLC.

The choice of IP is due to the ease of registration, as well as accounting and taxation. But at the same time, the entire enterprise is documented for one person, and the second is the unofficial owner. This option is not very practical, due to the fact that the second owner is nothas no documentary rights to the business and is built only on full trust. In the event of disagreements or any questions on the further movement of the business, one partner has a great advantage over the second, and in case of dishonest relations, he can simply "throw" the partner and take the entire business into sole ownership.

In the case of an LLC, the enterprise is formed with the participation of both partners, and their shares and rights are distributed according to their own agreement. This option is the most acceptable, since in this case the rights of both participants in the joint business are protected. Also, the advantage of organizing an LLC is a completely transparent financial system for any participant, which is especially important if there are more than two of them. Among the shortcomings of this form, one can single out the complexity of maintaining an accounting system and the complexity of registration.

Result

In today's business it is quite difficult to survive alone. A competent and reliable partner who will take on some of the responsibilities and risks present in any area will help you not only maintain your business, but also give an additional impetus to development. But you need to remember the basic tips for finding and organizing a joint venture, as well as the basic rules of business.