Community Economic Development Fund

Does 1 + 1 equal more than 2 ?

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The work, worry, and sacrifices required of those going into business is not much of a secret. Any entrepreneur paying attention knows they will be in for an experience with the potential to drain their health, wealth and heart. So why don't more small business rookies look for a partner to share the burden?  This article describes five reasons that connecting with a partner may be a smart move and four realities that should make you think twice.

To these lists let's add some additional considerations. Among the reasons listed in CEDF's Financial Fundamentals course for why some businesses fail is: Too dependent on a collaboration. Partners can be great until you no longer have a partner's critical skills contributing to the operation, and that will  probably be combined with insufficient cash flow to replace the talent. Then you might be doomed.

If you imagine, instead, that your operation would be better if you lost your partner, then either a wrong choice was made or the collaboration was unnecessary from the outset.

Settling the wisdom of taking on a partner or not should be a matter of simple arithmetic. 

Does one plus one equal more than two?  In other words, is the combination of talents likely to create more productivity than the sum of the same individuals working at identical endeavors alone? This might be because of a game-changing innovation that collaborators produce. Or it might be because of scale. The work required to get a foot-hold in an industry might simply need to operate at a speed higher than a single person can generate.

Or is the partnership a substitute for lonesomeness that could be better solved by just turning on the radio?



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