Finding the Right Business Partners

When starting a business, the entrepreneur has a choice of either doing it on one's own or with a partner. The advantage of doing it on your own is that decision making can be done much faster and get all the credit for a well run business.

However, there are times when a business venture is too much that doing things on your own won't be enough to make it successful. Maybe you also want to expand and will need additional resources to get through.

You can take out a loan to get additional capital and hire consultants for expert advise. The disadvantage in this set-up is its being short-term in nature. A loan giver's primary interest is to get their money back, with interest. A consultant will give their best advise but will not necessarily provide the resource and bear the consequence, if the actions they suggested did not turn out to be a success.

Get a business partner
Another option is to get a business partner who can be part of the company, through thick and thin, and do not give up easily. Here are notes to consider when contemplating of this option:

1. Decide what kind of partner do you need.
   Are you getting a partner for additional capital or expertise? Do you want them to be active participant in the business or passive? If you have the primary business expertise, then maybe passive partners will suit you better. However, if there are areas that you want to do, such as developing a franchise program and business for your company, then getting an active and expert partner is important.
   
   
2. How much stake are you giving?
   Depending on your estimated value of the company, you will definitely need to give a stake in it. Some partners join with cash equity, while others invest industrial knowledge.
   
   
3. Profile of the partner
   Typical companies usually has family members or relatives as their partners. However, there are times when the ideal partners are not necessarily family members. Before signing them on, make sure of the following:
   
   
• Credibility - do they have a good credit standing or background? Some companies who provide credit often check on the background of shareholders - to see if they don't have pending cases, credit record is clean, among others.
  
  
• Time - when needed, can they attend board meetings or review items of concern requiring attention? Even if they are passive participants, they should make time to do so.
  
  
• Conflict of interest - it is important for partners to have the expertise in the business. There are instances though that they may also have business interest with your competitors or suppliers (where they have developed the expertise perhaps). This can be both good and bad. You need to weigh if this will have an impact to your business relationship in the long run.
  
  
• Commitment - can they be relied upon to fulfill their part of the deal? Some partners, unfortunately, are not as reliable. This includes following cash equity investment schedule, knowledge turnover for industrial partners, and even proper turnover should they decide to let go later on.

Getting a partner is a very important decision. Do it carefully as the wrong one can give headaches later on. But if you'll be able to find someone who can complement your expertise, fill in the gaps, share your passion for the business, credible, and can make great things happen for the company, then that is a partnership worth strengthening.