I can Create Business

What to Keep in Mind When Looking for Investors

What to Keep in Mind When Looking for InvestorsCongratulations, you’ve decided to launch your company! You have an exciting business idea; you’ve thought through all the necessary steps to start and run your enterprise. If your venture requires more money than you have, the next move will be finding investors. This part is the most challenging. Admit it; you don’t have a habit of speaking with 50+ investors who get dozens of pitches like yours every day. The investors want to know why they should trust you, so show them that your business is worth their hard-earned cash. Every investor has his/her own approach to the evaluation of pitches. “Some do substantial due diligence before meeting (reading a plan, talking to people they know) and others granting a meeting without even looking at the plan at all. Some investors rely on their intuition while others crunch a lot of numbers. Almost all of them source carefully, make good use of co-investors, and focus on the entrepreneur and team” [1]. But, if you are a first-time entrepreneur and never dealt with investors, you may not know some factors that can be decisive for them. Let’s enlarge upon that point, following ideas of John Rampton [2].

1. The first factor that can discourage investors to give you money is a lack of potential success. Investors will be interested in your previous business experience such as launching a startup and whether it was a success, or not.

2. Trust is a must-have between you and investors. If they don’t trust your character, judgment, or leadership skills, it’s better not to start any mutual business at all. As the entrepreneur, be open to discussing issues and concerns regarding the company with investors. They want to know everything about your startup. Don’t worry; nobody is going to steal your business idea!

3. Character and professional skills of the members of your team play an important role in the business growth. Every investor will pay close attention to the team personnel.

4. A good business plan is crucial. An investor has to be impressed with it to invest.

5. A company that creates something new or has a new business model can easily attract investment.

6. Make sure you’ve chosen the right investors. Do research and locate those who are involved in your field before contacting them.

7. It is important for an investor to see that other investors are also interested in supporting your business and believe in your startup’s potential.

8. You’ve got “No” from an investor. Handle it properly. Think, what went wrong and make adjustments. Even after refusal, investors are watching you.

Remember, investors invest in people, not the idea. So, don’t pretend to be someone you’re not. Know your weaknesses and work on them. For example, if you’re afraid of speaking in front of people – learn the skill! You’ll need to present an interesting and clear presentation to attract capital investment. A denial from an investor doesn’t mean you’re a loser; this is just a temporary hitch. If an investor tells you: “Come back when you have more traction” he means exactly that. But, before you decide to come back to the same investor, know that there are 250,000 others in the United States alone.

Ways To Start Changing Your Mindset For Success Especially If You Are An Entrepreneur

The minute you felt called upon to seek out your freedom and prosperity through entrepreneurship or running your own home based business, what kind of thoughts and emotions flooded your mind?

Did you immediately feel totally confident that this would be the turning point of your life where you get to design life on your own terms and create your version of heaven on earth?

Or did you get filled with a sense of worry and overwhelm over whether or not you have what it takes to make such a huge thing happen?

For most people it’s always a little bit of everything… That’s why I am making this little article for you because I want to make sure that you don’t get stuck halfway through your rise into greatness and success.

If you know that becoming an entrepreneur and being independently wealthy is the reality that most suits you, then you certainly need to read through and gain better clarity as to how you can handle those voices and emotions of distress that will try to keep you stuck in the old way of life.

Why you need a change of mindset now

Most of humanity has been conditioned into a level of conscious awareness that has set the “normal standard” too low. For most success seekers, the dominant thoughts that saturate their days are those of worry, insecurity and fear.

This my dear reader is like getting into a battle that’s already been lost before it even begins because all external results and yes, that includes your business as well, can only come about if the level of consciousness and mindset you dwell in, is one that’s set on “success”.

When you already doubt whether or not you can win and gain victory in this endeavor, when you always feel like you’re not enough or that you don’t have enough, you are actually create a self-fulfilling prophecy that will come to confirm the secret beliefs that you carry.

You need to believe that you can succeed.

It’s important that you believe not only in the truth that you are capable of prospering but that you will produce the harvest that you want.

The level of your self-confidence will determine your level of productivity and your self-confidence plainly reveals how much you believe in Self.

When you believe in yourself you will always give yourself the chance to make things right because you know that you can make things better and that you do have something valuable to give to the world.

That faith and confidence that is very crucial for an entrepreneur can only come through a renewal of the mind and that’s why you cannot afford to postpone the study and retraining of your mind while you grow your business.

It is the winner’s mindset that we all need to cultivate in our lives, especially for those of us who didn’t grow up in abundant, prosperous environments.

I have created more resources and a video that explains what a mindset is and how you can effortlessly shift it, which I encourage you to check out but as of now, here are just three big ideas that will help you realize the kind of mindset you’ve currently got as well as how to start shifting it.

1. Start becoming aware of- what you are noticing and paying attention to – in your world:

Recognize whether or not you have self-defeating thoughts. What kind of an outlook do you have about life and entrepreneurship? Do you approach it with the expectation of overwhelm, struggle, pain?

What kind of things are you noticing as you go about your daily routine?

What kind of forums, communities and engagements are you having?

Are you noticing more prosperity or lack in your business?

Negativity and pessimism are like migraines and are quite difficult to ignore because they constantly nag at you. Sometimes these thoughts can be quite overwhelming and easy to recognize. However some people have become so accustomed to them and having created coping mechanisms, barely realize that they dwell in negativity and pessimism.

The best way to start recognizing where you stand is by keenly observing the words you use, the conversations you engage in, the actions that are subconsciously playing out and the way you predominantly feel throughout the day.

I have met a lot of clients who say they are positive and use affirmations yet halfway through our conversations all they speak of is what they don’t have and how much of a struggle life is.

This is certainly a pattern to watch out for because if you get so used to lying to yourself by pasting affirmations on your intellect and yet dwelling in negativity subconsciously, you might think that the universal laws or other people are to blame for your struggles and failure when in truth, it’s all coming from your mindset.

2. Learn to condition your mind by focusing on a specific desire.

Choosing, defining and living from your true desires is so powerful and paramount when you decide to seek out a liberating lifestyle.

This is because it means you stepping out of the norm that you were taught and raised with, to pursue your uniqueness and individuality.

There is great power in that! Which is why I only work with individuals who want to create a passion business, because I realized that even for myself, the only reason I overcame the African slum life and started creating success and prosperity was because I was passionate and in love with an idea.

If you don’t know what your passionate about, do something about it. If your entrepreneurship isn’t yet aligned with your passion and purpose, do something about it – you’ll be amazed how quickly things will shift in your world once you live from your true desires.

3. Learn to take risks and enjoy them

Most of us are so afraid of risks because we are working with false ideas about who we are and how life works.

When you learn the truth about your real identity, the role you play in life and how life really works, taking risks that you enjoy won’t sound so ridiculous or illogical.

Now, I can get into great details here just with this one tip and in fact I do in one of my training classes and a report I made on how to create massive breakthroughs as an entrepreneur, but just know this…

It’s very important that you learn the value of taking risks; taking a step toward something when you don’t really know where your foot is going to land, and doing so with full confidence that it can only turn out right.

This doesn’t mean being silly, or doing it recklessly while still ignorant of the principle of life. It’s why we first teach on what the principle of life is and how you can align with Spirit so that your mind can be conditioned rightly.

Then and only then will you know in the depths of your soul that you were born to be a risk taker and in fact all the good stuff that you want in life will come by very quickly when you stop tip-toeing through life looking for safety.

An entrepreneur who’s looking for safety is sure to be highly disappointed because without this ability to have a well-governed mindset that knows how to take great risks and enjoy them, massive success and prosperity will not become a daily reality.

Entrepreneurship and How It Makes You a Better Person

Entrepreneurship has traditionally been defined the process of designing, launching and running a new business, which typically begins as a small business, such as a startup company, offering a product, process or service for sale.

The above written lines state the meaning of the word entrepreneurship as per the widest searched platform on the internet, Wikipedia. But, the question is, does it really mean only this much or is there more to entrepreneurship. Let’s explore.

When you design a service or a product and think of launching it in the market, does it really just take that idea and the work is done? We sure know for a fact that this is not and can not be the case. It takes a lot more than just an idea to be running a successful business. The initial few phases of launching a startup are nothing but utter chaos. Also, understanding the responsibility takes some time. With time, the attitude towards life changes and also a sense of how to get things done is developed.

Let’s delve into what transformations you go through when you go from a common man to an entrepreneur. Let’s discuss what changes exactly you face within yourself and how you become a better human being. Being an entrepreneur grows on you, it makes its own personal space inside you or rather turns out to be a shelter and you find yourself engrossed in that space.

1) Value for money

If nothing else, your idea will first teach you what those crispy notes mean. It will make you understand the blood and sweat your forefathers had to shed to earn those sweet moments for you. Managing your product at a competitive price in the already high paced market and that too with some amount as profit margins will teach you how intricate running a business actually is. You will run from one place to another in search for a deal that saves you just another penny on your product because you understand how multiplication of that single penny will increase your profit margins.

On a personal level, you will not spend money on anything you feel you can go ahead without. All your savings from now will only be to fulfil your dream of a successful business.

2) Instinct

Welcome aboard your another board member, your INSTINCT. This is the only one thing that will guide you along in your career from now on. All your decisions will be based only on this. Your friend, your guide, your philosopher, your instinct will take you through all the ups and downs in your career. The only thing you need to do, is trust it and hit the target in the right direction. There will be partners, investors and a lot more people around you with their opinions, but when you get struck, choose to be your own boss and do what your heart says is correct.

3) Clarity of thought

Being the founder, you will be the single point of contact for a lot of people initially. All your teams, investors, partners, customers will seek guidance from you and this will need you to be clear about what you want from them. The process will instill a better picture of how to run your business and gradually you will be able to anticipate the changes in the market and stay ahead of the game.

4) Being practical

It’s all about the numbers in the end. Being practical is the only key to doing your business right. What will make or break your efforts is the reports you’ll generate about how well or swell are you. Practicality will be your best friend and emotions would not stop you from doing what needs to be done. After all, change is the unchangeable law of nature and you too have to adapt to what the circumstances demand.

Are You Willing to Risk Big to Build Your Business

We hire coaches and mentors for a reason; to stretch us, take us where we have yet to go and remind us of the little things that add up to big outcomes.

Personally, I hire experts to push me and encourage me to take risks (and big ones at that). What I fail to understand is when someone hires a coach and either never shows up for their calls, in-person masterminds, VIP Days or whatever is offered as part of the package. This truly boggles my mind.

Then there are the people who do take advantage of what’s being offered, but never take any of the recommendations to heart. What a complete waste of time and money. If you’ve hired someone for their expertise, be willing to put their ideas into action.

One of the greatest benefits of having a really strong mentor is the trickledown effect. What this simply means is: what we learn from someone else, when we apply it and get a result, we are able to teach others.

I’ve been hiring business coaches for years. Although I have a successful business, hiring a mentor gives me the opportunity to bounce ideas around with a trusted advisor.

A few years ago I hired an incredibly successful coach who is all about using the phone, live events and a multipronged approach to generating revenues.

On one of our coaching calls, it was recommended to host an open Q&A call on a Saturday. I got my marching orders and did exactly what my mentor recommended.

Not sure if I would get a result with people showing up, I sent a message out to my list to let them know all they needed to do was hop on the phone. No replay, no opt in, just show up.

Admittedly, I was a bit frustrated with less than 10 people showing up for the call. Yet, I gave those few people my all.

It was a pure Q&A call with one offer at the end; an in person mastermind event limited to 10 people.

One woman on the call jumped at the chance to join in on the mastermind. Not only did she pay for the mastermind, she went on to sign over $37,000 in coaching services with me. All from one small group call.

Here’s the deal… had I decided to ignore my coach’s suggestion, I would not have signed the client.

By being willing to be willing, and knowing this was why I hired this powerhouse coach in the first place (to get me out of my head, into action and stretch myself) I have had some incredible results in areas that I had not been focusing on.

Sometimes we don’t see the immediate results on things we do, but when we do the footwork, something gives.

Yet, how often do people talk themselves out of doing something without giving it 100%? And how much money and opportunity are they leaving on the table as a result?

Bottom-line is this; we have to be willing to take risks, have a multipronged approach to how we market our products and services and more than one way to generate revenue.

To have one, and only one way to bring in business is a huge mistake. To not risk keeps us safe… and broke.

The best thing to do is have short-term and long-term goals. With the short-term goals, make a commitment and stick with it.

Are you willing to do things differently? Are you willing to step out of your comfort zone? Are you willing to risk big to realize big rewards?

If you said no, maybe you are not cut out to be an entrepreneur. If you said yes, way to go. That’s what it takes to win big.

Actionable Tips To Remain Positive As An Entrepreneur

Actionable Tips To Remain Positive As An EntrepreneurMany people believe the main issue in their life is their income and that by changing their income they will change their life in such a way they will be happy. But first, you must change your mindset, while will then change your income and ultimately your life. It must be done in this particular order, much like planting a garden, to get the results you want.

As an entrepreneur, there will always be setbacks, so you must re-visit these steps on a regular basis.

1. Get Ride Of Your Addiction To The Outcome:
This is probably the most important mindset change you can make. It doesn’t matter what kind of business strategy you are using, when you are no longer dependent on the outcome, you can become more positive. This gives you the appearance of a leader in the eyes of your prospects and is exactly what other people are looking for.

2. Actively Work On Your MindSet:
How you do this is personal to you. You may find it by reading or listening to motivational books, meditating, yoga or exercise. Maybe you feel more positive when you talk to certain people in your life on a regular basis, or it may be a combination of many things. Whatever helps you remain positive, do it on a consistent, regular basis. This is something every successful leader works on all the time.

3. Stop Comparing:
Most everyone is guilty of this. Remember that everyone starts from the beginning. Every successful person goes through their own struggles. If you compare yourself with others, it will hold you back.

4. Keep Focused On Who You Want To Become:
This is slightly different from your why. Keep doing the daily activities that will get you where you want to go.

5. Learn How To Become A Happier Person:
No matter what, if you are generally feeling unhappy, it is impossible to have that positive feeling. You actually can become a happier person in general by developing strategies to overcome this. Learn to see things from another point of view and give up the need to be right all the time.

6. Quit Holding On To The Past:
Accept what has happened in your life and move on. Move forward. Things are going to happen and you must learn to simply move on. Learn to separate your business success from whatever is holding you back.

7. Smile! Laugh! Relax!
Give yourself a much-needed break from time to time. Have some down time and reward yourself when you reach small goals you have set for yourself.

These are actionable tips you can start today.

To become successful as an entrepreneur, you must first change your mindset before you change your income, which will have an impact on your life. Trying to go through these steps out-of-order simply doesn’t work. Once you change your mindset, the rest will follow.

Being an Entrepreneur

An entrepreneur can be defined as someone who is in control of his or her own destiny and who makes things of economic consequence happen.

To be an entrepreneur you have to have a particular kind of mindset. That is, you have to have; 1) a strong desire, 2) perseverance, 3) initiative, 4) persuasive skills. 5) a winning attitude and 6) a bottom line mentality.

To begin with you should write down your concept as to what you economically want to do as precisely as you can in only one paragraph. But in doing this you have to watch out for the various traps that exist in developing a concept. They are; 1) it won’t work, 2) you can’t make any money on it, 3) there is no market for it, and 4) there can be unpredictable customer behaviour. But also remember this; that the customer has to pay at least 5 times the direct cost of a product.

Now there are three types of Business entries that you should consider. They are; 1) starting from scratch whereby you should be prepared to take 5 to 8 years to start a business, 2) buying an existing business whereby the risks are less by saving time (1 year) for the business to be operational, buying cheaper assets, and by assuming cheaper financing, and/or 3) in buying a franchise whereby the risk would only be about 30%. Also you could be an Entrepreneur within a company as well.

The ideal business actually should have; 1) no investment, 2) an identifiable market, 3) a low cost supply, 4) minimum government regulations, 5) good price-cost ratio, 6) frequent buyers, 7) favourable tax treatment, 8) a good distributing system, 9) news value, 10) technical fashion obsolescence, 11) perishability and, 12) weather proofness

Three types of business plans should be written once your concept of a business starts to materialize. They are; 1) The Feasibility Plan, 2) The Operational Plan and, 3) The Financial Plan. Financing for the business could be accomplished by; 1) cash from customers, 2) sub-contracting, 3) your own money, 4) borrowing (from as few as possible) or 5) by leasing.

The Management team, if you decide to assemble one, should include; 1) the creator, 2) the driving force, 3) the marketer (the marketing strategy should be to find the competitive edge either in quality, price, or service) and, 4) a financial expert. Then you should give each of them part of the rock and teach them to listen to others.

Startup Tips For New Entrepreneurs

There is a little more structure to being an entrepreneur as well, and it’s not all ‘flying loose and free… ‘ The name of the game is having a goal, seeing the big picture, developing a plan, learning and re-assessing constantly, being adaptable, and following through.

This article offers up a few tips and some practical help to guide you on the start of your enterprise.

1. If you’ve got a job, don’t quit straight away!

This is something which I did myself, and it really was the best thing to get me started. It allowed for me to start up allocating the time and finances I could afford to invest in the new venture, while maintaining a level of stability. It bought me the time to be able to make a few mistakes, learn the ropes, and become confident enough with the direction that things were moving in, to be comfortable with giving up the day job without going into a state of panic.

It can generally take around six months to a year, (if not more), to get a business going, and where it’s possible to develop this while benefiting from the regular income of a nine-to-five… I’d recommend you do just that!

2. Discover your ‘Thing!’

‘Sameness’ will get you nowhere… in a time where prospects have an incredible range of choice, and can look for the best deals available almost instantly, you really need to set yourself apart to get ahead. Consider how it might be possible to specialize… Find out what people need, and offer it in a way that others, (especially larger companies, who are more likely to be able to beat you on price), can’t or don’t!

3. Increase your Visibility

Consider all the ways in which you can create brand awareness and brand recognition. Aside from promoting yourself and your business in person, and locally, (offline), it is essential that you develop an online profile. It doesn’t matter if you don’t trade online, the internet is still a valuable tool allowing for you to extend your reach dramatically and rapidly. Draw up a list of every avenue you can use to promote yourself, and then devise a plan to utilise as many as possible of these. Remember to capitalise on free advertising avenues too.

4. Adapt & Stick with It!

In order to succeed you need to be creative, maintain a level of energy and stay motivated even when you hit obstacles and delays. Reflect on all that does not go to plan, learn, regroup, adapt, and persevere. Remember that a majority of the most successful people in business didn’t become overnight successes… it took time, effort and determination. With this mind-set, you’re in good stead for success!

The Entrepreneurial Benefits of Failure

The word “failure” has many negative connotations. As an entrepreneur, you have to get used to the word and to the idea that sometimes an idea simply doesn’t work. But this does not mean that a goal is not worth chasing, only that there must be another way of achieving it.

It is important that entrepreneurs learn to see the benefits of failure and learn to identify the lessons that can be learnt from it.

Further, it is important that we learn to be resilient: it is easy to be disheartened by a defeat and to become convinced that the idea is not worth pursuing. But no experience should be disregarded, no matter how unsuccessful the outcome.

Failure, in one form or another, is inevitable for everyone, but particularly entrepreneurs. The first thing to do when facing disappointment is to take account of the facts – don’t ignore what’s happened or try to put a too-positive spin on it. Be honest about what’s gone wrong so that you can you accurately identify the lessons and take action.

For entrepreneurs, not knowing whether or not something would have worked can be worse than failure. Thomas Edison is claimed to have said of inventing the lightbulb,
“I have not failed. I’ve just found 10,000 ways that won’t work.”

Whether or not Edison actually said this doesn’t really matter. The point is that someone did and they were right: when an attempt fails, we do not have the result we were looking for but we do have a result. We know how not to achieve something and that is in itself a lesson.

Failure has its benefits

For one, in crisis we find clarity.

When something is going wrong we are often at our most clear-headed and decisive. We are able to think critically and thereby better isolate problems and find solutions.

Furthermore, crisis tends to have the result of polarising employees. When things are going wrong, the strongest members of the team will be the ones helping in whatever way they can and coming up with innovative solutions. Those that are ambivalent, defeatist (not to be confused with realistic), or simply unwilling to help, may not be employees for long.

Defeat is an opportunity to be creative. Now you know what doesn’t work, you can approach it from a different angle. Most entrepreneurs are creative and resourceful thinkers who thrive on challenge and risk, and are always keen to learn.

Not only does failure tell us what not to do but it gives us an opportunity to start fresh, imagine new ways of tackling a problem, and acquire new knowledge.

Finding success in defeat

Although failure is not ideal it should not be seen as a black mark. Instead, consider defeat as an experience. Experience is what makes us capable in life, hireable on a CV, useful in a crisis. We need experience in order to succeed; thus we need failure in order to succeed.

Indeed, we could argue that an entrepreneur that has failed more has simply taken more risks. Indeed, Elon Musk said, “Failure is an option here. If things are not failing, you are not innovating enough.”

We can see failed attempts as simply part of the process of iteration. In attempting to achieve a goal, we must assume that we will at some point fail. But failure is just part of the process. This is particularly true for serial entrepreneurs who, I would go so far as to say, would not be serial entrepreneurs were success always guaranteed.

Because failure can be so devastating, we often attribute that which is beyond our control to some individual flaw. The tendency is to take it personally.

Rather than being disheartened and discouraged, consider these questions:

• What were we trying to achieve?
• How much preparation was done? Was this enough?
• What was the approach?
• What were the problems with the approach?
• Of those problems, which are in my power to change, and will doing so change the outcome?

The answers to these questions will help you to construct your next, more successful approach.

In conclusion

Failure is only truly failure if we do not learn from the experience or if we choose to give up before extinguishing all other options.

How to Have Belief in Business

There are three facets to belief. If you are a Christian business owner, you must take these three things seriously in order to truly be successful in business and in life. These are foundational to who we are as Christians and as entrepreneurs.

Belief comes from an old German word that means “to hold dear, esteem and trust.” There is a lot of power in belief if we understand the belief pyramid. The three kinds of belief for Christian business owners are: belief in God, believe in self and belief in business.

Belief in God

I was talking to a multi-millionaire this weekend. We started talking about faith and he shared a great concept with me. He said, “I don’t know how people do it without faith. They have nothing above them to keep them from being dishonest.” He went on to explain that when people don’t have some sort of faith, they can do whatever they want. In business, that could mean taking advantage of others and running a business with little or no ethics. (It happens!)

Starting with a foundation that there is a God and He is bigger than us helps us get perspective about our place in the universe. We are part of something God is doing here on earth, and because of that, we want to help people and honor God with all of our decisions.

Belief in self

After we have a strong foundation in God, we must have a strong belief in ourselves. This one may be harder for some of us depending on what kind of family we come from. See, if we have been told we are worthless or that we will never amount to anything, those seeds of doubt can still grow even when our business is successful.

We must look at the belief in God first and build who we are based on what He says about our lives. Think about it for a moment. You may have had someone in your life tell you that you are not good enough, but our value does not come from people. Our value comes from God.

God calls us His children. He sent Jesus to earth for us. He loves us even when we were stuck in stupidity and sin. That means the God of the universe, who created us and everything in it, says we are good enough. We should revel in the fact that we are more than good enough for this world.

Belief in business

I know a lot of articles that would start with the belief in business, but I have found that other two must be foundational to what we do as Christian entrepreneurs. We must have a strong belief in God, which tells us who we are in this world, which informs what we do for our business.

In business, we are here to help others. We find a product or service that can benefit another person and offer it to them at a valuable price. Business is that simple. Yet, at the core of what we do in business, we must think about how God wants to impact the world and how our lives touches others.

Putting our beliefs together

I have talked to many people who want to start a certain business ‘because it will make good money.’ They jump on the bandwagon only to find it is a lot harder than they think and since they are focused on the money, they are never fulfilled in their business. They jump from business to business never really finding their place in the world.

I don’t want that to happen to you. I want you to have a strong core belief that God wants you to be in business. I want you to see that God created you with a strong purpose in this world to touch lives. And, God, the creator of everything, gave you the blessings and opportunities to be in business for Him.

Taking action

Do a quick evaluation for your life.

Start with God. What is your core belief in God? Is it based on a strong knowledge of scripture? If so, keep it up. If not, jump into some biblical studies and dig into God’s word.

Check on self. What is your purpose? Do you really believe that God put you on earth for a purpose? He did! If you are having trouble with your identity find a good friend, pastor or counselor. Really dig into who you are and find the truth of who God created you to be.

Evaluate your business. Why did God put you in your business? How does God want you to impact the world and share His love through your business? If you are not sure, dig into scriptures, join a Christian entrepreneur group, or just talk to a solid Christian mentor in your life.

Conclusion

I could write thousands of words, but none of it means anything if we don’t take action on our beliefs. We must take action on our belief in God, self and business if we truly want to be successful. God has placed His hand on your life, I know because you are reading these words and I am praying for you. You are called to be in business and you did not find this article by accident.

Pillars of a Successful Business Partnership

My first business venture was a partnership. Working with another person with similar dreams was the only way I was able to get started as a business owner. We coupled my general business skills and money, along with his expertise and time. We operated three units of a local pizza restaurant franchise throughout the 1990’s. I kept my day job, and my partner took care of the day-to-day operations of the business.

I’ve gone on to experience less rewarding partnerships, and fortunately, much more fruitful ones as well. I now understand more clearly why I prefer working in teams, and how I am typically more productive combining my skills and energy with my partners’. Starting with that first successful teaming, I have come to understand and appreciate that at the foundation of a strong business partnership are the three pillars of trust, respect and agreement.

1. Trust

Before there can be anything meaningful and lasting in a relationship, there must be a mutual level of trust. Trust, however, takes time to develop.

I have known David Begin, my current partner in various ventures, since 1991. We met when we both worked for a large software company, and have remained friends over the years. Our families have travelled together, and we have developed a close bond over time. When the opportunity first arose for us to partner on a business, we had already developed a deep trust at a personal level. This trust has been the basis of our business relationship. We rely on the fact, as good partners must, that we have each other’s interests in mind – we have each other’s backs in any situation. We try to consider what’s best for the other person, and what’s makes most sense for the business overall.

If you have the advantage of considering a partnership with someone with whom you have a long-term relationship, then trust should already be established. But what if you have recently met the person you are considering going into business with? How do you develop trust in a short period of time?

In my opinion and experience, it’s difficult if not impossible to rush the development of personal trust. There are, however, techniques we can use to accelerate the development of trust in a business environment. It requires careful and calculated observation, applied techniques, and lots of intuition.

In his book “The Trusted Advisor”, author David Maister explains that in business relationships you can quickly improve your “trust factor” by increasing credibility, reliability and intimacy while reducing self-orientation. The “trust factor” is a measure of trust, from the perspective of the other person with whom you are conducting business.

When it comes to measuring the evolving trust you have in a new partner, it’s applicable to consider those same factors. If the person is potentially trustworthy, they will likely demonstrate credibility (they tend to be accurate, complete, and don’t tend to exaggerate their knowledge), reliability (they follow through on their promises and are consistent in their actions and behavior), and intimacy (they are candid, genuine, and emotionally open). Low self-orientation (meaning that they are not always focused on themselves, they are good listeners, and don’t exhibit a need to always be right and win at all costs) is the other important clue to help you judge the character of your potential partners. It’s often most effective to watch for these indicators during the most casual of situations, like during a meal at a restaurant when the other person may reveal more of their true self.

Partnerships may not be a fit for people who do not like to seek advice from others, who do not prefer to share success or blame, and if they don’t see value in the opinions of others. As you are getting to know your potential partner, be sure to listen and observe carefully to identify these characteristics.

It’s also probably not a good idea to partner just for financial reasons. Overlooking a mismatch in personalities and vision in the short-term because that person has the money you need may eventually result in a negative relationship.

2. Respect

An effective business partnership also depends upon mutual respect. Ideally, your partners bring complimentary skills and abilities to the team. Combined with each partner’s perspective and experience, the group is considerably stronger and more effective than any one person could ever be by themselves. Team members must have a level of respect for each other, which fosters a positive and productive business environment.

Recognition and positive feedback are important for showing and feeling respect. We must take the time to recognize and appreciate the efforts and input that all partners bring to the collaboration. We all naturally want to be recognized and respected for our individual contributions, even if those contributions are never implemented. You demonstrate respect for your partner when you value or simply acknowledge their input, ideas and perspectives.

Of course, to gain respect, you must be worthy of being respected. Earning respect is in large part based on being a good person and partner (are you someone who looks for the best in others and who follows through on your promises and commitments to the team?) telling the truth and being transparent, and genuinely caring about your teammates. Respect the people you work with, and they should respect you in return.

3. Agreement

There can be complete trust and honest respect in a business relationship, but it can all come tumbling down with one seemingly simple misunderstanding. “I thought you were going to do this?” “No, I assumed that you would do that!”

During the honeymoon phase of the relationship, when we are caught up in the excitement of the new business, we may be quick to make assumptions and avoid difficult conversations. Dodging critical questions and assuming that things will always be great often leads to ruinous arguments later.

It’s critical that you clearly define upfront who will do what and how much time each partner will invest in the business. You also have to discuss and agree on many other points including the terms of a future buy-out – either because one of the partners wants out, or there is a death.

My business partner and I benefit from, and prefer, what we refer to as “active partnerships”. These are partnerships where all members are contributing fairly equally. It provides us the financial benefit of spreading the risk, but also sharing the burden and responsibility of building and growing our small businesses. It often makes sense to bring in investors, however, who are not involved in the day-to-day operations of the business.

Legal written partnership agreements are a must for any partnership. This typically includes an Operating Agreement and a Buy-Sell Agreement which is drafted by an attorney. The legal agreement defines all of the parameters and terms of the business, including who is the Managing Member, what capital is contributed by each member, and what happens when a member of the partnership wants to exit or can no longer perform their duties.

We recommend that you start with a Memo of Understanding. This is simply an outline that documents most of the terms of the partnership. Then you consult with an attorney to finalize the details and create the legal Operating Agreement. The key is to discuss and agree upfront on the terms of the partnership, and avoid the misunderstandings and resentment that can otherwise develop later.

There are many reasons why partnering may make best sense for your business venture, including funding (one partner or a “silent partner” provides the money for start-up), expertise (one partner has the expertise in the industry or business you are starting), and the desire to build a company with friends and family (although we always caution that you be careful when partnering with your friends and family as it may end badly). If you are like me, you may simply prefer, and be significantly more productive, when you combine your efforts with a partner. Regardless of the reasons, always consider the three pillars of trust, respect and agreement upon which successful business partnerships are usually based.

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