Successful Blog

Is It Time for a Business Partner?

by

If you are a sole proprietor, there may come a time when you begin to wonder if it is a good idea to take on a business partner.

Getting a business partner can bring many changes, and you have to be prepared to adapt to a whole new way of running your business. It is important to make sure that your new business partner will contribute positively to the growth and success of your company.

So, when is the right time to bring on a small business partner?

You are unable to solely manage business growth

 While a growing business can bring more profits, it also requires you to invest more time and effort.

If you are running your business all by yourself, you probably have to oversee every aspect of your business and do all the decision-making yourself. Even if you are a very capable business person, there may come a point when you will not be able to cope with the growth.

Taking on a business partner is a good way to manage growth, because it enables you to share your management responsibilities with someone who truly wants your business to succeed.

A partner who has extensive knowledge and experience in certain aspects of management can be an invaluable addition to your business. He or she can also help ease your decision-making burden and contribute new business ideas.

You need to team up with another business to compete with the big players

If your ambition is to become one of the major players in your industry, joining forces with another company can help you reach your goal.

Partnering with another company can be beneficial in many ways. It enables you to obtain additional expertise and knowledge of your industry, increase specialization, access valuable assets and funds for new development, reduce costs and expand your market share. With a greater market share, you will have a more significant influence on market trends.

Your business is on the verge of closing

Getting a business partner does not only help you manage and stimulate growth; it can also be an effective defensive business strategy. If your business is in serious trouble, it may be better to form a partnership with a strong company than to close it down.

A business partner can provide the necessary expertise and resources to get your business back on its feet. However, one disadvantage of entering into this kind of partnership is that you will have less control over your business.

If you want to gain back full control of your business later on, you can make an agreement with your partner to end the partnership on a certain date.

Taking on a partner can be a great business move if you do it at the right time.

To ensure that the partnership will be harmonious and successful, it is essential that you select an individual or company that has the same vision and values as you.

Photo credit: kclink.com

About the Author: John McMalcolm is a freelance writer who writes on a wide range of business topics, from small business management to biographies of famous entrepreneurs such as Richard Branson, Mark Cuban and Steve Wynn.

The Sure Bet: 4 Reasons Putting Profits Back Into Your Business is a Sound Strategy

by

By Angela Freeman

The ultimate goal of any company is to generate profits. This leads to an important question: what do those companies do with the profits they create? These 4 reasons should convince you that putting profits back into your company is a sound strategy that will improve your business’s future success.

1. It Gives You the Opportunity to Grow

Your company thrives at what it does right now, but will it continue to thrive in the future?

All companies must grow to experience continued success. When you put profits back into your company, you can use the money to explore new industries or improve on the services and products that you currently offer.

For instance, you could use the money to purchase new lab or tech equipment that will let you conduct more of your own research. That reduces the amount of money that you have to give other companies to conduct research for you. It also gives you more control over the quality of your research.

Both of these advantages will help your company succeed in the future.

2. It Lets You Spend More on Advertising

If your company is earning profits, then you know it has something special to offer clients. Putting money back into the company could help you pay for advertising that lets you reach even more consumers and businesses that want to use your services.

No matter what kind of advertising you choose, it will take a sizable amount of money. Radio, print, and Internet advertising can quickly add up to thousands of dollars.

Spending that money on something intangible might feel like a waste, but it’s the only way to get a bigger segment of your target market. If people don’t know you exist, they can’t choose your services.

3. It Helps Improve Training for Employees

Without properly trained employees, you can forget about continued business success. Every person working for your business plays an important role, so you must place an importance on making sure every person receives good training.

Good training costs money. Depending on your company’s size, you might decide to build your own HR department to handle training, or you might hire an outside contractor to do the training for you. Regardless, you’re going to need to put your profits into the training program.

In the long-run, you’ll see good results, because you won’t have to worry about employees who don’t know how to do their jobs.

4. It Means You Can Avoid the Pitfalls of Debt

Many companies borrow money when they want to expand, investigate new opportunities, or upgrade their training programs. Borrowing money, however, means paying interest. That can weigh your business down for decades.

Even if you get a good interest rate of six percent, which is really quite good, on $100,000 that you pay back within ten years, you still end up paying over $13,000 in interest. You’re better off putting your profits back into the business so you can avoid that extra expense.

What have you done with the profits your company made in recent years? Have you put the money back into your business, or have you made other decisions?

Author’s Bio: Angela is a freelance business, tech and travel writer. When she isn’t writing she is being a science nerd, messing around with her lab equipment, and attempting to bake. Follow her on Twitter @Ang_Freeman3.