Business partnerships can present exciting new opportunities for growth, but only if you find the right one and for the right reasons. While finding a business partner can be a great way to secure funding when you need it, it’s also important to consider the long-term implications.
After all, there are other financing options out there that allow you to retain full control of your business. At the same time, a new business partner can bring more to the table besides just an extra bank account.
What Are Their Skills?
If you’re thinking about taking on a business partner, you should try to find someone who complements you. An ideal partner possesses skills that you lack, bringing something new to the business. Say you’re excellent at handling the online side of the business, but you’re not much of a people person. You could seek out a partner who could handle in-person sales, conferences, and other networking events. When it comes to choosing a business partner, it’s wise to avoid rushing in until you’re confident in the potential partner’s unique skills, so you may want to spend some time getting to know them before making a decision.
Are They Willing to Share the Load?
Taking on a silent partner can be helpful if you’re in a pinch and you really need fast funding, as long as you define the terms in writing, in advance. At the same time, you may want someone who’s more willing to be a real part of the team. That way you can reduce your workload and hopefully gain a potentially valuable new day-to-day perspective. If your partner prefers to act as an investor rather than a true business partner, it may be smarter to seek out alternative investment options that allow you to retain full ownership.
Are You Willing to Give Up Control?
If you started your business from scratch and poured your heart into it, you may have a very specific way you like things to be done. Are you willing to give those things up? A successful business partnership is based on mutual respect and compromise. As long as you define your partnership goals in advance, you should be able to avoid conflict. However, sometimes unforeseen changes happen, and you want to be sure that you’re willing and able to negotiate and adapt.
Can You Afford a Partner?
If you’re seeking a partner for financing reasons, you may end up stuck between a rock and a hard place if you’re not generating enough revenue to pay your new partner. After all, there is no guarantee that business is going to start soaring after taking on a partner. That’s why it’s so important to set contractual terms in advance to protect yourself. Ideally, a new partner who is providing funding won’t take paychecks until your company is doing well enough, but you must consider the added long-term expenses associated with adding a partner — even if their funding would help you now.
QuickBooks Online makes it easy to pull small business accounting reports that help you to determine if you can keep going on your own or if financial assistance is necessary. Before seeking a partner for funding, you may want to look into other investors. You may find that getting a business loan is a better approach — a working capital loan is a great short-term loan option for business owners in India who need funding for business operations.
While a partner can look enticing during times of need, it’s important to also consider the big picture before making a major, permanent decision. The right partner could also be good news, so don’t rule it out entirely. Proceed with caution, and make sure you’re confident in your decision before signing any paperwork. Doing your homework beforehand is the key to forming a successful business partnership.