One way to expand your business is to get a partner. If you feel that it’s time to expand but you lack the resources, finding a partner may just be the correct strategy.
Partnership means sharing ownership and management with several other people or business entities who also share in the profits, and possible losses.
But before starting a partnership, look beyond your business’ current situation and try to see it from a long-term viewpoint. You need to think about the kind of people to get as partners, and what happens if the partnership succeeds or fails.
Friends may seem like obvious choices for business partners. However, I advise against this. Why? Because in a business, there will be disagreements on handling things, and if it gets too personal the friendship may suffer.
If you want to make a mark in the industry, choose your partner wisely. Don’t rush. You need to find the right person that can help boost the business instead of just investing money in it. Here are some the qualities of a good business partner.
- A business partner must share your passion and vision for your enterprise. Therefore, he/she needs to give his/her full commitment to the business.
- You need to find someone that you can trust and rely on. You must know their work ethic. Otherwise, you may just be burdening yourself.
- Your prospective partner must know how to manage money and has no records of any financial trouble in the past.
- Find a partner who is creative and innovative. You want someone who is able to consistently generate original and fresh ideas.
- You need a partner who has an open mind and can look at things from different perspectives and recognize other possibilities. Your partner must be willing to consider the suggestions of others, otherwise it would be difficult to retain the partnership.
Once you’ve found someone who has these qualities, the next step is persuading him/her to sign up with your business.
Here are a few tips.
- Let the person know the profit potential of your business. Lay out all the numbers and explain how the partnership can lead the business to the next level.
- Lay out your marketing plan. Include projections from various media so that your prospect has a clear understanding of how you want things to work out with your business.
- Let the person know who you are- how committed you are to the business, the skills that you have, and the achievements you have made. Your prospective partner should know the kind of person he/she is dealing with.
- Provide an outline of how the business functions, from procurement to customer care.
- Based on the numbers that you have laid out, come up with a monthly budget for your first year in business and annual budgets for the next two years. Remember to include exactly how and when the investor will be paid. You need to have an agreement on how much the investor will be receiving and when he should start expecting to be paid.
Once you have made it all clear to your prospective investor, you are on your way to expanding your business.
Armando Bartolome’s writings appear Thursdays on GoodNewsPilipinas.com
(Armando Bartolome is known as the Philippines’ Franchise Guru, a mentor to numerous micro entrepreneurs who are now themselves big names in the industry. This article is reposted with the author’s permission and was previously published on The Business Mentor column posted by ABSCBN News. For questions and more information, you may contact Armando “Butz” Bartolome by email: firstname.lastname@example.org or on Twitter @philfranguru. His website is https://www.gmbmsglobal.com/ )