Almost everyone wants to start a business these days but there’s one thing holding them back; LACK OF MONEY. Since banks are not enthusiastic to give startups money, many entrepreneurs either go to angel investors or form partnerships.
Angel investors can get you the money you need but you have to consider a few things. For instance, are you ready to get money from someone who might be difficult to get non-financial help from? Getting on board with an angel investor is like getting married, only problem is you can’t get divorced easily. They eventually become your business partner whether you like it or not.
As a startup, it’s not advisable to give up half or any part of your business to an angel investor even though they provide quick access to capital. A business partner on the other hand is a better option. You can find a business partner anywhere. They can be your workmate, a friend, your local pastor or even your rich uncle.
A business partner can be a great resource in terms of money, business advice or business connections. The good thing about working with a partner is that you do not have to give them a part of your business. If the partnership does not work out, you can always get out of it. That being said, let’s focus on how to form partnerships that will help you get your business off the ground.
1. Partner Up, Don’t Take Advantage
Just because you do not have money to start your business doesn’t mean that you should approach people thinking of how much free stuff you can get from them. This kind of attitude will only get you so far.
Think in terms of a partnership. If structured properly, partnerships always work well. Once you make someone feel like a true partner rather than someone being taken advantage of, then they will invest in your business as much as you. If you want an hour of your partner’s time then you have to make it worth it.
2. Make Sure Your Idea Is Fully Baked
I am a fan of the popular TV show Shark Tank that airs on ABC Network. It’s fascinating to see how many people walk into the show with ideas that might sound ridiculous but end up walking out of there with life changing deals. At times people walk into the show with mind blowing ideas but end up with nothing. Why? The “Sharks” do not appreciate half-baked ideas.
Yes, you have a concept, you have a fascinating idea but is it something that will convince a partner to work with you? Talk to trusted friends and family or even a business associate and see if they think your idea is a winner. If it is, then you can start looking for partners.
3. Make a Compelling Offer
Imagine if someone walked into your office and asked for a $10, 000 loan and in return they offer to pay your money back within a month. No interest, no share of the profits, just the original sum of money they are asking for. If you’re thinking what I’m thinking then yes, I would laugh them out of my office.
Make your potential partner an offer that will make them as giddy as a school girl. For instance, you can offer to split the profit 50-50 once your deal goes through. There’s a better chance that they will jump on board with you but first, you have to make them see that your business is profitable.
4. Establish Trust and Credibility
Look at it this way. You want someone who has never met you, let alone even heard of you to invest their time and money in your business. What reason can you give them to make them trust you?
For starters, you can discuss your previous professional achievements with them. For instance, if you have been successful at sales and marketing, then you can establish credibility and trust based on this idea. This way, your partner will see you as someone who has previously succeeded in something business oriented.
As you can see, you do not need to get money from the bank or investors to start your own business. You can find partners to help you out. If you can convince a potential partner to invest a little of their money and in return they can be part of a promising new venture, they may jump at the chance. Plus it is much less frustrating than trying to get money from Aunt Jane.