Pros and cons of getting a business partner
I started off as a solo 1099 but later formed an LLC-Partnership with a friend of mine.
There are pros and cons to forming a partnership as opposed to staying solo.
- You have a buddy to talk shop with
- You can split some of the work
- You can help each other find new projects because you have a bigger collective business network
- It's less lonely
- If you ever decide to get your company a Facility Clearance (FCL), you have the minimum of two "Key Management Personnel" to qualify for one. One can be the designed Facility Security Officer and the other can be the Assistant FSO
- There is more tax and administrative stuff you have to do as a partnership which incurs more costs
- You have to reach agreement on joint business decisions which can be frustrating if you just want to do things on your own
- If one party is doing more work the other may resent it
For me, I'd say it has been an overall positive experience, particularly since we decided to hire employees. However, if I didn't intend on hiring employees, I'd probably just remain a single member LLC. The only scenario in which I'd partner with someone and didn't hire employees is to get a FCL. That way we can manage our own security clearances.
I'm fortunate to have a good partner. Others aren't so lucky. Partnerships gone bad is a classic business tale. Make sure you think hard about whether that's a path you want to go down.