Main challenges and advantages of starting a business alone

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Self-employed, limited liability entrepreneur , limited company of successive formation, professional company; the legal alternatives for starting a business alone in Spain are very varied and interesting.

However, when it comes to starting a business, the same question always arises: alone or with partners? In recent decades, numerous experts have studied the eternal debate trying to find scientific arguments.

And yes, although the data is favorable to solo entrepreneurship , the recent history of capitalism shows that having a good partner can be the key to success in the face of strategic or financial obstacles .

Today at MÁSMÓVIL Negocios we explore all the angles behind solo projects, and we explain what needs to be taken into account when making these types of decisions without support.

Advantages and disadvantages of starting your own business
You may also be interested in: “ Ideas for starting and setting up a business this 2021 ”

The factor that guides the decision
According to data from the Ministry of Economy and ivory coast number data Business, Spanish startups have an average lifespan of 2.4 years . This means that many of them fail , especially when taking their first steps.

As the Entrepreneurship Map points out, only 5% of these companies survive to five years, and most worrying of all: 15% do not survive more than twelve months . Why does this happen?

The mistakes that are usually made are very varied, and one of them is related to the initial choice of any project: the formation of the team . One might think that the crisis encourages the search for partners, but instability has a double effect .

In 2013, entrepreneur Alejandro Suárez showed one side of the coin. “ There is so little money for companies that are just starting out that, faced with the impossibility of obtaining financing and hiring staff, the entrepreneur brings together as partners those who, in other circumstances, would have been just employees .”

However, the risk associated with entrepreneurship also acts as a disincentive for potential partners who do not want to invest their own capital . And when they do, they do not think about capital gains.

“ People start businesses with partners out of fear ,” says Luis Monge Malo , CEO of Clever Consulting . “ They think their partners complement them, and in some cases that will be true… for the first 1-3 years, but after that you have to share the benefits with someone else for the rest of your life .”

Is it therefore better to rely on partners when setting up a business? The truth is that there is still no unequivocal answer.

Data in favor of starting a solo venture
If we look back at the history of some of the world's most highly valued companies, it is easy to see how cooperation between partners has often underpinned their success. Hewlett-Packard (HP), Baskin-Robins or even Apple .

Steve Wozniak has stated on numerous occasions how important his connection with Steve Jobs was in the founding of n, and it is easy to find similar stories in many other companies.

Now, if we look at the big picture for conclusions, the reality is that starting out alone increases the chances of success , as confirmed by professors Jason Greenberg and Ethan Mollick in a prolific study published in 2018 .

“ Companies created by solo founders survive longer than those created by teams ,” they conclude. “ They also generate more revenue than those created by founding couples, and do not perform significantly differently than larger teams .”

It is not a trivial difference. The study, carried out with more than 3,000 startups over seven years, reveals that companies with a single partner are 2.6 times more likely to succeed and survive over time than those that share responsibilities among several partners.

The tests show that startups with several founders do indeed get more funding at the start . But this does not improve their survival rate in any way, because their expenses are higher and because they tend to share less austere visions.

“ No matter the formula, starting out alone is always better ,” says Monge. “ In addition, I provide services to startups and I have seen the most terrifying wars between partners .”

It is not always better to start alone
Sharing control with other partners means dividing responsibility for important issues such as corporate culture , market strategy, labor policies , pricing and distribution, or financing channels.

They are often practically insurmountable fronts for groups that do not share previous experiences or that are strongly united by blood ties or deep friendship. And even so, sometimes the risk can be profitable .