Do You Need A Business Partner?

Do You Need A Business Partner?

Are you lonely in your business? Do you need someone to talk to? Maybe you need a person to bounce ideas off of, someone who can help you make decisions. Or maybe you need some financing.

In a small business it is necessary for the owners to have many skills, but no one can do it all or know it all. Make an assessment of your skills and decide which areas you can handle yourself and in which areas you need help. The next step is to decide if the help you need can be purchased at a reasonable price or should you attempt to find someone who has these skills who would like to join your business. If your business is incorporated then you will call this person a shareholder. If your business is not incorporated then you are operating a proprietorship, which will become a partnership once there is more than one business owner.

A partner or shareholder is a person who shares in the profits and losses of the business; this person does not always expect to be paid for each hour of work, because they own part of the business. A partner’s advice is cheaper initially than buying professional advice. However in the end if the business works out, you will be sharing the value of your business with this partner.

A partner should be someone that you can work with, not necessarily someone that you like. Being in business with friends is often a bad idea if you want to stay friends. Each partner should have different skills. If both of you are great marketers then you need a third partner who can handle the administrative side of your business.

Many small businesses are unable to grow as fast as they would like because they do not have enough cash flow or capital. A way to solve this problem is to find a silent partner who has money to help out. A silent partner will offer funds and advice but will not help in the day to day operation of your business. Are there people like this around? They are called angel investors and are typically successful business owners who want to give back. You don’t pay them any interest for a while but eventually you have to buy them out. If you are going to get involved with partners or investors make sure that you have a clearly worded agreement.

Having a partner can be a great idea for small business success, providing you with low cost financing and good advice.