One of the major challenges facing entrepreneurs and business leaders is finding the right business partners. Great care should be exercised when selecting associates because the right choice can bridge gaps and assist in the execution of your business plan. The wrong choice can harm the reputation and earnings of your company. So, when forming strategic alliances, you should consider:
Finding Believers in Your Mission No one will champion your cause like a true believer in your product/service. Align yourself with those who comprehend the magnitude of what you are doing and will offer wholehearted support to your endeavors. Those who align themselves with you solely for monetary gain will often carry a short-term perspective that will conflict with your long-term business strategy.
Active Partners vs. Passive Partners Are you looking for an active or passive interest holder in your business? Do you seek someone who will be involved in the day-to-day management of the company? Many entrepreneurs opt for passive partners to avoid having them encroach on the management of the business. If you elect active partners, it is important that they share the same vision, objectives, and ethics as your associates.
Smart Money vs. Silent Money When pursuing financial partnerships, you have several options. You can choose investors that will solely provide financing, or you can partner with funding sources that will also offer guidance and help in strategic planning. Silent money could be the right choice if you have a seasoned management team and desire total creative control. However, if in both cases you will surrender the same amount of equity, it makes more sense to partner with investors who are well-connected and may offer advisory services.
Complementary Skill Sets Your ideal operations partner will have a complementary skill set to strengthen your areas of weakness and allow you to compete effectively. The right affiliations will, most importantly, shorten or eliminate product and service development time. Your resources will not have to be spent acquiring expertise in areas where your partner is already adept.
Alliances Your ideal partner should be in a position to help you form strategic partnerships. This person/organization should be able to help you align yourself with people who can assist in growing your business. Strategic partnerships can also bring about needed political affiliations.
Growth and Exit Strategies A major point of contention for many partners is the company’s growth and exit strategy. Some parties may be content as the owners of a small business, while others seek to franchise or go public. All parties should be in agreement on how they plan to access the equity of the company, whether it be by salary and dividends, or a substantial liquidity event.
The right partner can ease the road and multiply the profïts of your business. Whether you’re looking for investment funds, advice, a complementary skill set, or helpful associations, choose your relationships wisely.
Finding the Right Business Partners - To learn more about this author, visit William R. Patterson's Website.
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