Making the decision to go it alone as a "sole proprietor", or take partners or investors on, may be the single most important business decision you ever make. Determining whether or not you have the investment cash start up the business, then deciding what you can physically and capably invest - time, energy and experience - will help determine whether you should take on partners or investors.

Sole Proprietorship:

Most business owners go it alone, hiring employees when necessary. Especially when the niche they serve can be handled alone, or by a small number of people. And, today, most business are small enough to be started with savings, personal lines of credit, credit cards, retirement or investment monies, for example.

If you enjoy working alone and making all your own decisions, a sole proprietorship is for you. Generally speaking, you are responsible for operating all facets of the business - from creating business plans to buying, developing, selling and marketing your products. You may decide to hire out services you're unfamiliar with or incapable of handling, like marketing or sales.

When deciding to forge ahead as a sole proprietor, it's important to know your strengths, weaknesses and usual energy level, before starting up your business.

Here's some important things to think about:

* Do you have the energy and stamina to run your own business full time? If not full time, how much?

* Are you generally an optimist, you get over setbacks fairly quickly?

* Is working diligently second nature to you; learning as you go a challenge rather than aggravating?

* Are you self confident? One who likes to make things happen?

* Are you a self starter? Willing to throw yourself, enthusiastically, into the next new project?

* Can you handle the emotional ups and downs of fluctuating sales, when your business first starts up?

These are just a few of the questions the U.S. Small Business Administration recommends you ask yourself before starting up a business.

The numbers of businesses who've failed because an owner didn't compensate for their weaknesses, by hiring others, is legion. Before you go it alone - without partners or investors - read some books, take some classes and learn about having a sole proprietorship. Seriously research the products or services you plan to market to be aware of the time, effort and financial investment necessary Join a group who can provide the info and help you need; regularly visit the U.S. Small business Administration site; do some research online. Talk to experienced sole proprietors.

Remember, when you're the sole proprietor, the ultimate success, or failure, of your business lies in your hands.

Partnerships:

My experience, as well as that of thousands of others is - nothing affects your day-to-day work life more than the people you work with. And it's never more true than when it comes to partners.

Choosing a partner may wind up as being as important as choosing a husband, wife or significant other. I kid you not. And in many cases, a business partner exerts as much control, and influence, as any of them. So it's important to get to know a potential partner well - their strengths, weaknesses, ability to handle emotions, stress, money, for example.

Try to scheule time to work with them to discover their reactions to normal day-to-day activities and challenges; these might be miles away from yours. How they react and handle customers and employees may perfectly offset your abilities if you don't enjoy handling either. What are their business skills? Are they capable of handling those which you either don't want to handle or aren't capable of?

When you spend time with any potential partner/s you're more likely to discover whether their work-methods, goals and communication skills mesh with yours, and any employees you plan to hire, before taking them on as a partner.

Some Important Questions to ask yourself before taking on a partner:

What are your expections of a partner? Are they realistic? Are you expecting them to "run the show", while you take a backseat, or vice-versa? Are you willing to write down your expectations and discuss them with a potential partner. Are you willing to set out definite lines of authority and responsibilities so they know what they can do and how far they can go? Do you want a partner short-term, or for the long haul? What must you absolutely agree on; what are you willing to comprise on?

A Few Questions to Ask Potential Partners:

* What are your goals?

* What's your reason for getting into this business?

* Will your family, or other obligations, require attention which pulls you away from the business (such as illness or small children)?

* Does your family support you in this decision?

* How much time and money are you willing to invest; for how long?

* What responsibilities are you willing to shoulder; what do you see yourself taking charge of; what would you prefer to handle (for example - customer service, ordering, hiring and training)?

* What do you see as the future of this company?

* What are your expectations?

Legalizing Your Partnership Arrangements

When it comes to partnerships, it's essential to legalize them with a formal written aggrement - organized by you, drafted by a lawyer, and signed by all parties involved. Whether you're selling crafted products out of a space you share with a friend at a Saturday marketplace or opening a full-scale retail or online operation, it's imperative to have some type of formal, legal agreement.

Some of the issues this formal agreement spells out are:

What percentage each partner owns; who owns what; what each partner is responsible for; whether other partners can be taken on; what happens to the business in the case of death of a partner. Can a partner sell off their portion of the business. What's your exit strategy or buyout policy?

Formal, legal agreements are usually followed, partners less bitter or combative, situations less financially explosive if they end, than businesses started with a handshake. Unfortunately, the end of a business partnership can wind up like a bad divorce, with each partner attacking the other, fighting for control and ownership of the business. Formal agreements can help partnerships, not only run well, but end amicably without unnecessary legal action.

Investors:

Taking on an investor is a huge step, and not as easily reversible, if it doesn't work, as having a partner. It should only be taken after much research and consideration. And after exhausting every other possiblity of obtaining your own investment money. In otherwords,you have no ability get obtain a personal loan or one from a family member or friend; no credit line or credit card money available; and absolutely no other way to obtain the money you need to start up your business.

While an investor may be a god-send, remember, you no longer have sole ownership of the business. The investor owns part of it, and has a say in it's running. With a partner, for the most part, the partnership agreement is one you developed; one for which you designed a buy out or exit strategy. This is not the same situation as it is with an investor.

Remember, an investor owns a part of the business. And as an owner, has rights. For instance, they are entitled to share in the profits as well as the losses, for tax purposes. And they have many other legal rights. And may try to take the company away from you if things don't work they way they want them to, or expected.

With a partner, you set up an exit strategy, or buyout, if things aren't working out. Not so with an investor. Ridding yourself of them can turn into a complicated, legal nightmare. In fact, chances are you are more likely to get the boot, losing your ownership in the business you started, than to rid yourself of an investor. So do your research: go online and Google them; if they own business locally, check those out; hire an investigator, have background checks done. But dig deep. You're tethered to an investor "till death do us part".

A Few Questions to Ask Potential Investors:

Since an investor will be with you for the life of your business, it's even more important to do your research and spend time getting to know them. You can safely ask them - What types of businesses they've previously invested in? Were they successful? What are their reasons for wanting to invest in your business? How much involvement have they had in past investments? What level of participation will they have in this business? What are their goals for the future of the business?

A few last words: Once you've done your research, and before you make any decisions, consult with an attorney specializing in business partnerships and investors. Their advice may be the most valuable you'll ever get. And it might save you from losing your business.

Jean L. Serio, Copyright 2006. Are you one of the 1.2 million women tired of the 9-5 grind, sick of worrying about making ends meet? As you know, starting a business still remains one of the best strategies for providing financial freedom. Discover how to start a business, today, with your own step-by-step Action Plan. Plus to ensure you receive all the details FREE and learn how you can harness the power and resources you need to start, sign up for your Free Newsletter "Start Up A Business Today" and receive your Bonus Report, "5 Mistakes Women Make Starting Up a Biz". Go to: www.womensmarketingandbusinessnetwork.com "We help you make it happen!"