Benefits Of Having A Co-Founder Verses Going Solo When Starting A Business

Benefits Of Having A Co-Founder Verses Going Solo When Starting A Business

There are a lot of benefits, and downsides to having a co-founder.  One thing to remember is that most businesses fail in the first couple years, and only 3% last longer than five years.  Having a co-founder or going solo can play an enormous impact on whether you succeed or not.

As an Entrepreneur, you can’t do everything alone.  If you think you can run every aspect of your business by yourself and give each area 110% while staying ahead of the competition, then you’re kidding yourself.  You need to focus on the areas you do best in, and outsource areas you don’t do great in to someone who can do it better.

Having a co-founder from the start can help you immensely grow a business.  You can grow it faster, and easier when you are splitting the duties required when starting a business.  If you choose to have a co-founder, it’s important to find someone who complements your skills and what you bring to the table.

Having a co-founder is like being married, it’s a intense relationship where you have to trust the other person a lot.  You don’t have to like the person who you are working with, but what is important is how you both act professionally towards each other.  Not all partnerships are equal, not everyone brings the same skills and experience to the table – so not all co-founders always share the same equality/ownership in the business.

Someone that has far more experience in the field and brings more knowledge, connections and previous experience into the relationship may have a higher equity share even if they don’t do as much day-to-day work.  On the other hand, if both partners, or if you have three or four, that are all bringing roughly the same amount to the table but certain partners will be required to do more – then equity should reflect that as well.

You must weigh the pros and cons of having a co-founder.  One downside is that you’ll have less ownership, less equity in the company.  So essentially you will earn less.  Another downside is that not everything will go your way, sometimes you should compromise and listen to the other co-founder(s).

My personal favorite relationships between co-founders is one that can handle back-end, and one that can handle front-end.  Back end work is product sourcing, purchasing, shipping/delivery and logistics, manufacturing & distribution, taxes, legal, data entry, and anything website related.  Front end work is social media, blogging, customer service, sales, advertising, and marketing.  A relationship like this is a perfect pair for most online businesses – whether it’s a product or service.

The other option if you don’t want a co-founder is to outsource work to other small businesses via their services, or if you hire staff or freelancers.

What’s great about outsourcing is that you aren’t sharing any profits/equity.  But you are paying money for staffing/services.  If you have the means of finding the right people to help you, this is a great option if you can grow the company really big.

If you lack experience and knowledge in a field, then getting a co-founder to help you start your business will be a great asset.  You’ll have a higher chance to succeed in the space than if you were to go at it solo.

Thanks for reading!
I hope you enjoy all the blog materials i have to offer.

Damien Defranco
Founder & Chairman of the Board
Defranco Enterprises Inc & Defranco Enterprises LLC

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