So you have decided to take on a partner to share in your self-service car wash startup costs. Yes, a partnership can be a solution if you don’t have enough capital to cover your startup expenses. However, as with everything else, taking on a partner has its advantages and disadvantages. It is best that you consider the pros and cons before you make a final decision to avoid problems later.
Aside from having someone to help you in the self-service car wash startup costs here are the benefits and disadvantages of having a partner in your self-service car wash business
Pros of having a partner
A partnership is easy to form
A huge advantage of a having a partner in your self-service car wash business is the ease of setting it up, says Businesstown.com. It is easier to file because the legal documents required are more straightforward than a corporation. The tax treatment is also less complicated as there are no special taxes necessary. You and your partner are individually taxed on your share of profits. This is according to Boundless.com. Your self-service car wash does not have to pay income tax. All profits and losses are passed through to you and your partner. Your business partnership will still have to file a tax return indicating the profits and losses, but your self-service car wash business does not have to pay taxes on its income. As Allbusiness.com puts it, “The biggest advantage of a general partnership is the tax benefit.”
Having a partner can give you s better perspective
Having a partner means you have someone you can bounce ideas around with. Your partner can spot flaws that you may have missed. With a partner, you have someone who can help you ask the right questions when making a decision. Your partner can also offer you valuable opinions in your self-service car wash’s day-to-day operations. As they say, two heads are better than one. Decision-making is not as difficult when you have someone to brainstorm with.
A partnership means shared load
A partnership means that you have someone to split the required hours that have to be put into managing your self-service car wash business. Having more than one person responsible for your business makes the business operations easier to run. Running a car wash business can be challenging and require a lot of things to be done. With a partner, you don’t have to do everything on your own. You share the load with your partner. He or she can concentrate on bookkeeping and auto detailing marketing, while you focus on day to day car wash operations human resource management. Going on a vacation would not be a problem as you have a partner you can take turns with. If you get sick, you wouldn’t have to worry about the state of your self-service car wash because you have a partner who can cover for you. Apart from this, a partner can be the person you can share financial issues with, like raising capital for your self-service car wash start up costs.
Cons of having a partner
Of course, it’s not all a bed of roses. There are certain disadvantages to having a partner in your self-service car wash business. Here are the disadvantages that are worth thinking about.
Having a partner means you have to share the wealth – and the debts
As an article on Bplans.com put it, having a partner is like being married. It can turn sour and end up with a “divorce”. Naturally, like a married couple, you have to share the profits with your partner. You don’t get to enjoy the full rewards on your own. You have to divide the dividends between the two of you. Moreover, you and your partner are jointly and individually liable for the business activities of each other. If your partner incurs debts in the process, you will be responsible for those too.
Too many cooks can spoil the broth
One big problem with having a partner is not having total control of your self-service car wash business. There are going to be several decision makers. This can result to conflict. Especially if you have different personalities, you would end up arguing most of the time. This is counterproductive for your business. You would get very little work done. It will have a negative impact on your self-service car wash business. Your car wash could end up a casualty of your battle with your partner.
Work equity may come up in a partnership
At the start of the partnership, everything seems to be equal, like your share in the self service car wash startup costs. However as the partnership continues, you might not be expecting the same thing as your partner in various aspects of the business. An example of this is in the amount of work you should each put into the self-service car wash business. If there are no clearly defined roles and responsibilities, it may eventually be a problem. Sometimes, partners do not have the same view on what is expected of each other. Or you may have started with the same expectations but one partner may end up not putting in the effort that was initially expected of him. This could be caused by a lot of things, like loss of energy or personal problems. Whatever the reason may be, it will not do your self-service car wash business any good.
To take on a partner or not is a very important decision that you will have to make. Making the wrong decision can damage your self-service car wash in the long run. Consider the pros and cons well. Do not take on a partner as an easy way out. Or just for the convenience of having someone to shoulder part of the self-service car wash startup costs. Now that you know the pros and cons, ask yourself: Am I the partnership type? As with the other types of business ownership, a partnership is neither a guarantee of success nor a sure formula for failure. It all boils down to whether a partnership is what works best for you.
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