Have you ever taken on a business partner for the money?
My (small commercial printing) business has taken on a lot of debt. I am considering a gentleman who is interested in partnering . He would bring in "new" customers because right now he brokers or sells printing (WE do some of his work).
Anybody Cialis cheap done this before? I know I need to consult an attorney and of course my accountant but I would like to know the plusses and pitfalls of doing this including personal issues (We seem to get along as business associates).
Basicly I would be doing it to "save" the business so I hope I’m not at a disadvantage already.
Thank You Jeff M. You made some good points to consider and gave a lot of sound advice. I did purchase (lease) newer equipment to be more competitive; Now I have the equip but the "newer" business isn’t coming in as fast as I need; I;m actually using personal $$ to keep this afloat but I know there will be an end to it and bankruptcy’s NOT an option. I hired a consulting firm back in March and, yes indeed I need to increase business (volume).
This gentleman has been a broker customer of mine going on about 8 years; we even have some common personal things (our kids participated in youth sports together). About 5 years ago he proposed to ME a partnership but at the time things were going good so I declined; Now he’s talking about purchasing some equipment on his own (I haven’t approached him yet on this partnership thing). Yes, he is a broker and sends a lot of work to high end manufacturers (WE’RE more small to medium) so WE would get the work.
I own a company (www.SpeedBinder.com) that is also in the graphic arts business. I understand how tough things are for printers right now. In my city, there are a few of them going under every year. It is a tough business.
In my view, you need to ask yourself why your business is struggling, and then make a clear-headed assessment of whether or not taking on this partner will directly address those issues. If you had an infusion of cash, what would you do with it?
Pay off your AP? That’s the wrong answer. You need to understand why you are losing money first. Throwing more money into a money-losing business is not going to help.
Buy more/newer equipment? That’s a better answer, but if new equipment would help you be competitive, why not just aquire it via vendor financing? No reason to give away equity just to get a new press.
The other thing to ask yourself is why this potential partner wants the deal. What’s in it for him? How much of your company are you going to sell him, and for what price?
This guy is a broker. If he has business that he is currently sending to your competitors, why? Why aren’t you getting all of his business? If he becomes your partner, is he guaranteeing you that you will get 100% of his business (at least that which you are set up to handle)?
When a business is struggling, there is always a tendancy to go after any deal that means an immediate infusion of cash, but don’t let the cash blind you. If you aren’t addressing the fundamental business issues that are causing the problem, then all a cash infusion will do is delay the day when you have to face the facts.
Take a decision and go for it.