Great! You’ve legally registered your business. But what are the things you need to know when looking for business partners, and how do you know it’s time to find one, two, or more?
That can be bewildering.
So you’re advised to carefully read this article because it proposes to explain the essentials involved when you’re looking for business partners in a down-to-earth manner.
Indeed, whatever niche or industry your business belongs to, in every stage of your business life, you’ll need people to partner with you. Because you need that (and them) to facilitate the progress of your business to the next phase.
Why are you seeking partnership opportunities?
Hardly will you find a static market because more businesses get registered and incorporated. Now and then, new products get introduced into the markets.
As a result, new competition and challenges to be dealt with arise, just as new opportunities to explore spring up.
And achieving that may mean more funding, human capital, or the introduction of particular expertise into your business. Often these require money and would call for partners to join you to enhance expansion.
With that said, however, when searching for business partners, you must be honest with yourself.
To that end, you must first identify what you seek to achieve by bringing partners and investors into your business. So you may have to ask and answer some of these questions.
Questions Entrepreneurs looking for business partners need to answer:
- Do you intend to introduce new or specific highly technical skills to your business?
- Do you want more funds to develop a new product line, scale up your marketing efforts, and increase your equipment, inventory, or other business facilities?
- Are you ready to give up some of your autonomy? If yes, to what extent? Well, it is something you must answer yourself— and perhaps, with your management team.
Looking for business partners? How to find a business partner for a startup
Many entrepreneurs looking for business partners usually wish someone to take their hands and lead them throughout the process.
However, below are sources and people from which you can secure funds while you turn them into business partners:
1. Angel Investors
These are individuals who are highly influential with impressive net worth. And they provide financial support to small startups in exchange for ownership equity.
So as an entrepreneur, Angel investors can help your business find footing. Yes, they give backup to starting businesses to live above the difficulty inherent in the early stage of every business cycle.
Though It is a risky type of investment, it often is not more than 10% of the portfolio of the angel investors. In order words, Angel investors have lots of money but give a tiny fraction as an investment to small enterprises.
So you can say the sole goal of these investors is not the profit they would get from the businesses; instead, they are more concerned about helping startups launch out with baby steps. Based on this, they have better terms compared to other lenders.
Seeking partnership opportunities with Angel Investor
Note consulting local and national directories of investors or investment groups can help you find angel investors that will be ready to partner with you.
Nevertheless, you must note that looking for an angel investor as a business partner online is quite daunting, but leveraging on the close connection of the angel investors makes things much easier for you.
3. Professional networking platforms
Professional networking platforms are handy for business owners looking for a business partner or investor. So to grow your business, these are the types of platforms you should harness.
Sites such as Linkedin are invaluable when trying to establish with people who may be interested in what you’re interested in.
Globally, in over 200 countries and territories, 850million people are part of the Linkedin community, with economic opportunities.
So you can take advantage of this platform when seeking partnership opportunities.
Looking for business partners online
Crowdfunding is a channel or means that allows many people to pool resources for a specific purpose. And most of the time, these connections are formed or enhanced via social media and crowdfunding websites.
While there are many crowdfunding websites, some bring entrepreneurs and investors together. And through this type, entrepreneurs can pitch an idea to other investors.
In other words, you can also harness crowdfunding websites to raise money for your business. Below are some of the types of crowdfunding:
- Peer-to-peer lending
Peer-to-peer (P2P) lending, also known as “social lending,” is a form of crowdfunding without any financial body serving as a middleman. P2P lending websites allow people to lend or borrow money from one another.
In other words, Peer-to-peer (P2P) lending is a financial technology that helps individual investors get a better return from their money than they would have from leaving their money in the bank. Yet affording the P2P borrower a better alternative to the conventional bank (which may come at a lower interest rate).
Seeking partnership opportunities or looking for business partners using crowdfunding
- Donation-based crowdfunding
Donation-based crowdfunding is a type of crowdfunding where a large number of people donate money upon the request of a person or a group.
As an entrepreneur, you can use donation-based crowdfunding to raise money or gain partnerships with hundreds or thousands of people.
In donation-based crowdfunding, contributors (or backers) may receive incentives or not. But this depends on whether the essence of the fund is for a business or a charitable course.
In other words, as a business owner searching for business partners, you can raise funds from many who, in return, may get some reward. Thus, you can use these donations to launch new products through pre-sales.
However, some donation-based crowdfunding platforms entrepreneurs can utilize for business purposes include Kickstarter, Indiegogo, CrowdFunder, and RocketHub. While some of those aimed for a charitable course include GoFundMe, FirstGiving, YouCaring.com, and GiveForward.
5. Venture capitalists
Venture capitalists share similar characteristics with Angel investors because they fund startups in exchange for an equity stake. But unlike angel investors, venture capitalists are more interested in already established businesses with high growth potential.
6. Family and friends
Family members and friends are a common source of finance known to entrepreneurs. Still, many business people don’t like to raise funds this way because of its downsides, especially when it involves some partnership.
You’ll agree that it can be hard to separate business from pleasure, especially when dealing with family members or close friends.
Well, it all depends on a lot of factors. But if you decide to get funds from your families or friends, you must be sure it’s what you want. And, of course, you must be ready to be business-minded– starting from the point you pitch your business to them. You mustn’t joke with legalities because of the pre-existing informal relationship with these individuals.
Qualities to look out for when looking for business partners
Entrepreneurs looking for business partners must be individuals who are observant and have a good sense of judgment, especially when it comes to spotting the best candidate(s). Be it an individual or group.
So if you want the best for your business, here are some of the qualities you need to look out for looking for a business partner or investor:
When you’re searching for business partners, you first need to find out if the individual(s) are passionate about what you do. That’s crucial because it will save you from awful experiences in the long run.
If you eventually get someone or a group that’s not enthusiastic about your business, products, or services, chances are they’ll barely bring value to your business. Instead they’ll help you devalue your business over time.
Looking for business partners is not only about fund
Integrity is a paramount quality. So it’s a virtue you want in your potential business partners. Because in business, you need a reliable person or a group and can follow a plan, decision, or resolution without compromising.
Looking for a business partner or investor is like finding a life partner and can be daunting. But as a business owner, you must put your business first.
By putting your business first, I mean taking its future into perspective because this will inform your decision about who to choose as your business partner(s).
You would have to ask yourself some tough questions:
- Does this person have integrity?
- Does he have the expertise or something valuable to the growth of your business?
- Is he open-minded like you?
- Does he have good communication skills and a powerful networking group?
From your little experience in business, you already know that starting a business and scaling it up is not a bed of roses. It’s a journey filled with learning because challenges will always pop up.
That’s the number one reason you should pick a business partner(s) with emotional intelligence and a thick skin for challenges.
Because if you have this type of person as your business partner in the face of challenges, you won’t get knocked down. Resilient people are not quick to nag but ready to think of solutions to help your business weather the storm(s).
A final thought on looking for business partners
Looking for a business partner may require you to review and rewrite your business plan or perhaps write a business proposal.
Whatever be the case, writing a clear statement on a piece of paper of why you truly want a business partner is a significant step in the whole process. Yet that is just part of the research you’ll have to carry out— you need to know the source of funding you want, as we’ve looked at in this post.