Is it worth looking for a partner?

Discussion in 'Growing and Managing a Business' started by Ashley, Oct 22, 2009.

  1. Ashley

    Ashley
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    ok some of you may have read some of my other posts about my tshirt company and how im looking for an investor (if not read Here

    Well i was thinking would it be better off to look for a partner to help with the project and input money into it,

    like i was considering asking a few friends so 3/4 if they fancied helping because if if we all chip in money it means the costs are lower but also the profits per person are lower.

    im just wondering if people think in my situation have more chance of getting an invester or a partner(s) to help?

    Thanks​
     
  2. daytrader

    daytrader
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    lower profits per person is not a problem so long as there will be more clients.
     
  3. Tecknowoman

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    Partner or investor depends on what you need and where you want to go.

    If you really want an investor (think about a business angel) you really need to be able to think about the value of your business, the cost of their investment, return and the like. With an investor you also need to consider what the value of the investment is as a percentage of the value of the business. The value of the business is going to depend a lot on sales not so much on what you've already invested. Also think through the exit strategy before you start. Think it out like you were a bigger business asking for a much bigger investment and you will always present well and be prepared with answers to any questions thrown at you. Therefore more likely to be invested in.

    My tendency would be to avoid doing business with friends unless you have hashed out all the plans including pay back and exit strategies. It is easy for everything to be good in the beginning and for these things only to happen to others we won't be that way but we can never predict how people's circumstances will change or how they will react if they do. Have agreements in place.

    If you have more people contributing a smaller amount and hence more people sharing in the profits you may need to consider smarter, more cost effective marketing strategies and promotion.

    Have you considered allowing potential sales people to buy into the business so they invest and then they not only get paid but also profit share in the overall success of the business. This would offer a much bigger incentive than just a commission to sell really well and may actually attract some people with some sales savvy!

    These are obviously just my thoughts and I'm not from the UK so don't know any of the ins or outs of legalities there. My biggest advice though would be to think through your plans as if you were a multi million dollar company, what you'd need to know, disclose, what would be the most cost-effective and best strategy long term. Then you are likely to make a sound decision which ever way you go. The most important thing is to make a good decision not a good short term solution.
     
  4. Fergal

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    Tecknowoman has given you some excellent advice, thanks for that. My suggestion would be that your next step should be to start working on a business plan for your business. This will give you a much clearer view as to where you want to take your business and the assistance / resources you need to help you take it there. You might find the business plan templates in our Useful Business Resources / Links thread helpful.

    Try not to be daunted at the thoughts of preparing a business plan. You really can achieve a lot by taking an hour or two to sit down with a pen and paper or keyboard and putting a very basic plan together. Do the plan for yourself in the first instance. Try to keep it as realistic as possible and don't worry about what anyone else would think of it. You can tweak it at a later date, before presenting it to others.

    Once you have written a basic business plan you will be in a much better position to know what you want from a partner or investor and you will also be in a much stronger position to present your business ideas and agree a deal with potential investors and partners. I'd also recommend that you don't rush into giving away any share of your business. If things don't work out, your situation could be difficult if other people own part of the company.

    As you are based in the UK you might consider contacting your Local Enterprise Agency - you should be able to find your nearest one by using the drop down list in the box at the bottom right hand corner of the page. They should be able to give you practical advice and tips to move your business forward.

    Good luck with everything Ashley and please do post back with your thoughts and we will do our very best to help you.
     
  5. dipcliper

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    is it worth looking for a partner!?personally if you can manage by yourself go!it's better to be alone in a business no complications..i guess you have a wife or a father that you can talk to..and ask what he/she thinks about it:)
     

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