Of late, partnership form of business has become vogue in several countries. Partnerships are being formed straddling into several economic sectors including trade, industry and agriculture. Let us find out why you need a business partner now whereas you have been going solo for all these years.
Firstly, let me define what partnership is: A partnership is basically an arrangement between two or more persons who will act together in furthering their mutual interest in any trade or venture or business with a view to share profit or loss. A cardinal principle in partnership is that every partner is bound by the mutual interest which is sacrosanct. We call this as common interest. Therefore, it behoves partners to show interest in a partnership and avoid any conflict of interest. However, there is no reason to expect that every partner will have the same level of interest. Some partners take active part while there are instances where you see a non-active sleeping partner.
You need a partner for your business due to the following reasons:
1. Capital: In majority cases partnership is formed because one person alone cannot contribute the entire capital requirements of a business. Lack of capital is a perennial problem impacting initiation and growth of businesses. Even though we see sole proprietors abound in many sectors their scale of operations is fairly limited. Their growth opportunities are stunted. Therefore, it is better to bring in partners who can contribute additional capital requirements
2. Fixed Assets: There are instances where you require a property in the form of land or building for the conduct of a business. Instead of blocking your money you can co-opt the owner of such land or building as a partner in the business. Sometimes you may require a particular plant & machinery. Here again without resorting to bank loan or leasing you can persuade the owner to be partner in your business
3. Knowledge: Another reason for formation of business partnership is specific knowledge required by a business that is lacking there. In this regard let me submit to you two issues: One is that we are today in what we call as knowledge based economy. The other is that entrepreneurship is not necessarily knowledge based. You are an entrepreneur. If a particular knowledge base is vital necessity in your business then either you can resort to hire it or bring in the guy who has such knowledge as your partner. In highly competitive areas such as technology it is better to form partnership rather than opt for hiring
4. Skills: Yet another reason for bringing a business partner is skillset. You are running a business on government tenders and you are often confronted with your inability to liaise with government officials. You are too pre-occupied with the nitty – gritty of the operations and have not developed the liaison angle. Sincerely, you do not like to hang around with scheming officials. In this case you are well advised to get a guy or gal, the latter the better, to liaise with those who work behind the panelled tables in government departments
5. Connections: This is one of the smart reasons to take in that new partner who has wide contacts in the sector where you do your business. Contacts not only give you real business they can also give you what we call as business leads, that is, hints of potential business elsewhere in the sector
6. Companionship: A behavioural reason forming partnership is the need for companionship with another person for the sake of having someone else in a business. In some cases companionship turns out to be too vital that, business collapses without one. Companionship canopies contribution in areas such as business advisory, lightening business load, helping out in legal and administrative matters or simply just to be around. Some businessmen prefer an elderly person while some like to have a fair lady around
7. Cosmics: As you know cosmics are aspects residing within you shaping and influencing your business though these are un-seen and un-noticed by you. If your business demands cosmics that you do not possess it is better for you to get someone else who has this cosmic energy. For example in service and entertainment industry, you need a partner who has the charisma and can captivate hearts and minds of your customers by his mere presence.
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