How to find a business partner for a start-up company?

The number of start-up organizations has been rapidly increasing. As a new establishment, it can be hard to find business contacts. However, working with others allows for professional growth. It requires flexibility and eagerness to apply interpersonal skills to form a well-functioning team. This article will explore different ways to search for relevant business partners as a start-up organization. Then, opportunities for finding relevant partners and organizational growth are introduced.

Benefits of finding partners

Revenue

One of the biggest challenges is financial management. The planning for financial resources can determine the success of a start-up. Failure occurs due to the impossibility of sustaining employees, developing new products, or establishing itself on the market. Therefore, it is beneficial to establish relationships with those who will gain financial profits for the company. Additionally, having a loyal and transparent relationship is important.

Diversity

Expanding cultural perspectives is ethically right and also important for organizational adaptation to new trends. According to McKinsey, “diverse companies are more likely to financially outperform their peers.”. Hence, striving for new diverse partnerships can have an effective brand positioning. Additionally, it can increase profits.

Internally, it is a change that must be evaluated and reflected on throughout the entire management to achieve results. Otherwise, if not done properly, employees can get overwhelmed. For example, religious viewpoints, gender-based assumptions, and stereotyping differences can create confusion.

Improving skills set

Staff skills help in developing loyal relationships with customers. So, it’s important to be aware of employees’ strengths. Then, they can be used to the advantage of the company. Challenging staff through new projects and offering seminars, workshops, and training is effective in working on weaknesses. Still, new parties might have a positive effect on task division due to their knowledge in different spheres. Moreover, building partnerships gives start-ups access to unfamiliar contacts. This expands the network of the company.

The process of finding partners

The process of finding partners is different depending on the type of partnerships the organization strives for. This relates to the company objectives, goals, and defined timeframe of success. Moreover, the company should be aware of past and ongoing market trends and spot potential future trends through research. According to CB insights, 42% of start-ups fail due to a lack of understanding of the market demand. Hence, creating loyal partnerships requires knowledge.

Types of partnerships

The type of partnership can be established based on objectives, tenure, nature, legality, duration, and liability. General partners are responsible for management operations within the start-up. Also, they have “unlimited liability”. On the other hand, limited partners own a financials take within the company. However, they do not have managerial rights. Finally, limited partners are stakeholders of the company. So, they are not accountable for business debts.

The bases for establishing the partnership are explained below:

Partnerships according to the company’s objectives

1. Partnership at will – the agreement is open-ended. Thus, all parties can exit the partnership with a given notice.

2. Particular partnership – this agreement depends on the timeframe of the venture it was created for. Once the venture has been completed, the partnership is dissolved.

Partnerships according to tenure

1. Fixed-term – an end date is set to the contract. After this date, the partnership automatically expires.

2. Flexible – there is no fixed timeframe and no specific venture in the contract.

Partnerships according to liability

1. General partnership

The agreement should include each of the parties’ roles and shares. Furthermore, specifications on future intentions for closing the business after the dissolution of the partnerships. The general partnership is easy to establish and flexible. However, it’s taxed on personal income rather than on a company level. Moreover, the parties involved are liable for each other’s actions.

2. Limited partnership

On the contrary, limited partnerships require at least one limited and one general partner. The limited partner is not liable. Therefore, they do not face as many risks as the general partner who is accountable for decision-making and management.

3. Limited liability partnership – LLP

If someone legally takes over your business, you are not likely to lose personal assets. Depending on your geographical location, you can have liability protection from other parties involved. But, usually, only certain professionals can establish LLP. For example, lawyers and doctors.

4. LLC partnership

Two or more members make up this partnership. Their personal assets are protected and there is tax flexibility. Still, members can be held liable for each other’s actions but they cannot be sued for business’s actions or debts.

Where to look for new partners?

Search engine optimization

With the advancement of technology, partners can be found online due to the large database available. Starting superficially, search engines are helpful suppliers of general data. It works with particular words and phrases taken from the company’s website content. Thus, finding and exploring your niche might require a broader timeframe.

Partnership websites

However, partnering with entrepreneurs is being promoted more. Therefore, assisting in finding contacts is now a prosperous field. For example, there are websites like https://stealth.li/ , https://cofounderslab.com/ , https://www.starthawk.io/ , https://founders-nation.com/ , https://www.cofoundme.org/ etc. They provide entrepreneurs with a channel as well as a large network to connect with.

Social media

Moreover, social media is being used more for businesses. So, potential partners can be contacted through LinkedIn for instance. Additionally, MeetUp is an option, although there can be excessive spam emails. Still, it offers events and groups tailored for business meetings and connections with potential partners.

Events

Events and conferences are functional ways of networking. They offer a suitable environment for professionals to find the right contacts. Going offline has proven to be effective for a long time. Networking groups such as the Chamber of Commerce provide many contacts.

How to maintain communication

Communication between partners should be established on mutual trust and integrity. Also, legal documentation should prove the existence of an agreement. However, cultural aspects should be based on cultural awareness of your partners’ preferences. Especially with international deals. Moreover, it’s important that both parties maintain certain levels of communication regarding the progress.

Conclusion

Finding partners is almost a requirement for fast success. It brings many advantages and extra contacts and help face competitors. However, the communication and research are important factors. Although its difficult, finding partnerships is essential for the company. It helps the start-up head in the right direction.