There are pros and cons to each option. Philippe Richard Bertrand, who is a partner and chief growth officer at Amplio Stratégies and chief growth officer at Univers Interactif, explains the advantages and disadvantages of both possibilities to help you make the right choice.
All good businesses have three core areas: sales, production and administration. To be successful, each area should have a leader at its helm.
A partner can bring unparalleled value to the business over the long term. "It's a good idea to choose partners whose skills compensate for your shortcomings," says Richard Bertrand. Partnering with others is beneficial in many ways, though there are also some drawbacks and obligations that you will have to deal with.
• Stronger ties and deeper commitment
This can be an advantage in a world where people change jobs often. Not to mention the fact that, "When business heats up, you won't have to worry about paying a partner overtime," says Richard Bertrand.
In most circumstances, an employee won't put in 80 hours per week unless they are compensated for it.
• Better decision-making
If you forge ties with the right people, you'll benefit from their points of view, which can lead to better decisions than if you were on your own. This can be very helpful for growing your business.
"I had a business that failed because I chose employees and partners who were too much like me," explains Richard Bertrand.
• More financing
"It can be easier to secure financing if you have a partner, because you'll have more collateral for your loan," says Dominique Renaud, a tax specialist at Desjardins.
• Higher costs
When everything goes well, you share the wealth (i.e., the profits). If your business relationship goes south, dissolving a partnership will cost you more than it would to terminate an employee. That's because partners are shareholders in the business. The emotional impact will also be more significant.
• Greater accountability
Are you in the habit of taking prospective clients out for lunch? Now you may find yourself having to justify the expense, as your new partner may not be convinced that the expenditure is worthwhile.
In the eyes of the chief growth officer at Amplio Stratégies, an employee is there to execute tasks. At best, an employee is ready and able, delivers quality work and contributes to the company. While workers bring added value to your business, they can also cause headaches for employers.
In many ways, you have a lot more options with an employee. For example, an employee is easier to replace than a partner if they don't meet expectations--even in a competitive labour market. "With a partner, the cycle takes several months," explains Richard Bertrand.
• Lower costs
At the end of the day, an employee will cost you less than a partner, even when you add up the salary, benefits (which add at least 20% to base pay) and other expenses such as training.
• Decreased retention
"Loyalty doesn't exist in the current employment market. People hop from one job to another," says the growth specialist. That means that you'll have to repeat the hiring and onboarding process often.
• Longer training
Workers aren't productive starting on Day 1. You'll need to provide sufficient training, including on areas like corporate culture and operating methods. This takes time and therefore costs money.
What's the best option?
Start by hiring employees and stick to that strategy as long as you can. "But I like to position a company for growth, and to make that happen you need partners who are just as committed to the cause as you are," advises Richard Bertrand.
When do you know you've reached the tipping point? Once you've established a critical mass--either in terms of sales or number of employees--you can start looking for a partner to take care of one of your business' three core areas.
At Amplio Stratégies, two partners work alongside 14 employees. Whether you opt for a business partner or worker, make sure you choose someone whose skills are complementary to your own.
Pitfall to avoid
Don't rush into choosing a partner or employee. Even if the situation seems urgent, take the time to think about your needs. Bringing the wrong person aboard could cause more harm than good.