One of the most fundamentally important, and oftentimes messy, situations in starting a business is deciding whether it is going to run as a partnership or a sole proprietorship. Each have their advantages and disadvantages, to be sure.
This podcast really just serves to point out some of the things you should keep in mind in signing on a partner.
Shownotes for JDsPodcast: Episode 13.2 – Proprietorship vs. Partnership
- The benefits of a sole proprietorship
- Full, 100% equity
- Control of the business
- Absolute decision making and implementation
- You will be responsible for the success (or failure) on your own.
- You can shape the business anyway you like
- The drawbacks of a sole proprietorship
- 100% equity – legalities can take everything
- No sounding board or advisory board for decisions (unless you appoint them)
- No one to collaborate or work with
- One person can totally kill the business
- VC’s and investors do not encourage it
- The benefits of a partnership
- Partners share decision making
- Work can be divided
- Emotional support in a professional sense
- More networking contacts
- More areas of expertise and further education
- More total experience in sales, management, etc.
The drawbacks of entering a partnership
- Share the equity and ownership responsibilities
- Share profits
- Share control
There are also some personal experiences such as design, coding, marketing, and directional focus.
Anyway, I hope you enjoy the podcast. Any thoughts or comments, let me know! Have a good weekend.
JDsPodcasts.com – Episode 13.2: Proprietorship vs. Partnership
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Great job explaining these. The only thing that I would add is that even if someone decides to go it alone without a business partner, they might still want to consider forming a corporation, LLC, or similar entity.
Also, if someone already has business partners that they’ll be working with, they might also want to consider talking to their partners about considering a corporation or an LLC as the official entity instead of just a partnership.
I think that the actual entity types themselves were kind of outside of the scope of this one, but a nice followup explaining some of the implications of each would be interesting.
That is a great addition to the article. I appreciate it!
Also, I am going to email you in regards to PartnerUP. I would like to hear a bit more about the company if you get a chance.
Thanks
Jason
I like this website and the company
I like this website and the company keep up the good work
Woudln't creating your own LLC be the better option than those 2? Why not have limited liability and full profit ownership as well? I've been learning more about this investing in small business consulation companies athttp://www.microcapreports.com/ . I want to start my own LLC soon and I see it's only around $175 to start any sort of business in general. Cheap way to hide taxes and build expenses.
Woudln't creating your own LLC be the better option than those 2? Why not have limited liability and full profit ownership as well? I've been learning more about this investing in small business consulation companies athttp://www.microcapreports.com/ . I want to start my own LLC soon and I see it's only around $175 to start any sort of business in general. Cheap way to hide taxes and build expenses.
sometimes Sales Management takes a lot of effort and skill.’~-