Will You Take a Partner or Work as a Sole Practitioner?

There are pros and cons on this subject, but from my viewpoint, if you can avoid it, I don't recommend taking on a partner. A partner is like a spouse. Now, please let me say that I am not recommending that you not take a spouse, just a business partner. Most of the partnerships that I have known over the years ended up in a divorce and it usually wasn't friendly.
Yes, there are definite advantages to having a partner. It's great to have a peer professional to discuss technical issues with and to share overhead expenses. For example a proprietor has to pay for his or her own tax software and library while a partnership buys the same “tools” but spreads the cost out amongst more clients. Another important advantage is that it helps attract bigger clients when they know you have some backup.

When considering a partner, think about choosing someone who will compliment your specialty and experience. If you are a tax person, it would be good to bring in a GAAP person for reviews and audits. If you are more of a back office person, partner up with an outgoing salesman type CPA, often referred to as a rainmaker. But be careful of this arrangement because it might appear that the back office person is doing all of the work while the salesman CPA is going out to lunch with prospective clients everyday.

For those of you who abhor the thought of flying solo just keep these thoughts in mind:

and oftentimes it's because of the partner's wives. One wife becomes jealous of the other wife or feels that you are doing more work than your partner or your partner has a nicer office yet you split the profits. Just remember that you need a friendly exit plan and there should be an established plan for resolving conflicts between the partners.

 


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