Where are the best places to look for a business partner?
I am looking for a partner to reopen my gelato store in a different location. All equipment and training included but I'm finding it challenging to find a person that is searching for a new business, perhaps is on a lower budget etc. Where should I go to find a business partner? Are there any places in particular that I could go related to the hospitality/restaurant industry?
A great question and one which every entrepreneur should ask when they start to expand.
Bruce has hit the nail on the head with his response.
Do you need a partner or a good manager? A partnership is for "life" (of the business) and you will be sharing the fruits of your labours with this person for a long while. For that price they had better bring something special to the partnership.
Managers on the other hand can be replaced, and are paid a salary (and a performance bonus), leaving you with the rewards from your vision to develop the business in the first place. The challenge though with a manager is you have to keep paying that salary during the start up phase of the new store. Of course, if the store is unsuccessful, with a manager in place it can be closed, but with a partner you have no choice but to relocate.
Finding a partner can be a real challenge. Not unlike finding a spouse. Finding someone you get along with well (even in the inevitable hard times) has your values and is able to match you with "skin in the game" is no easy matter. Just like dating partners can be every where, go to networking events and put the word as far and as wide as you can (social media, blog etc). The earlier comments about partnering with a competitor were right on.
Lubosh, questions -
- as Bruce asked, why would you not be looking for a manager as opposed to a business partner? Are you in need of their cash infusion?
- which causes me to ask, does your business plan and P/L support a business partner...if your business was making a big profit, you would not have an issue finding a business partner. But with only one location currently, is it really a partner you need or capital infusion from investment, loan, etc...?
- your business plan should support multiple growth strategies to ensure growth...and one strategy would be to manage it up to profitable growth prior to bringing on partners...seek capital elsewhere.
Finding [good] business partners is easily the hardest part of any business in any industry.
1) I'm not about to jump on the "hire a manager" bandwagon, but I will say this: it's way easier to fire an employee than it is a partner.
Also - consider that at the manager/partner level, you may be able to entice interested managers with profit sharing and even growth into partnership (it's a good way to test the waters before diving head-first into a partnership). Anyone with a keen sense of business and a genuine interest in growing your brand will consider the offer seriously. Anyone dismissive...well, that tells you where their head is at anyway, right?
2) If you have particular reasons for looking for a business partner, then you need to shop EVERYWHERE. Investment meetups, Treatings.co, LinkedIn groups, friends-of-friends, etc. You've got to really hustle -especially if you're constrained by scheduling to make this happen.
My biggest fear for you is that in a dash to line stuff up for the next season (which is soon, if you're in Australia, right?) you will join with a sub-par partner who will cost you more time and money than if you had gone the venture alone.
Partnerships, like marriage, shouldn't be rushed.
3) Have you considered franchising instead of bringing on partners? I've got some connections with teams who specialize in helping businesses shift into a franchising model. PM me if you're interested.
Seems to me that the only potential partner would be someone who also has a gelato store and wants to share in an expansion. You are in a special business with a lot of competitors offering similar products so the most natural partner for you would be someone who is also in the business and familiar with it. Otherwise it's like trying to find a needle in a haystack.
I guess the consensus is a good manager is one way to go. I should have explained in finding a partner I meant someone that perhaps does not have the money to purchase the business but would be open to do so once it is setup and going. I'm looking to make setting up stores a new venture for me - and often people do not have enough capital to pay for everything so I'm happy to be "paid" in a share of the business for the training and setup assistance - but it has to be cashed in after some time...
It sounds like you want to bring in a manager who MAY want to purchase once the business is operational. How do you envision compensating your "partner"? Would their compensation be strictly monetary in the beginning or do you envision a "work to own" approach where some of their wages are in company "stock"?
The second approach sounds like a difficult pitch but what you're looking for. It sounds like the first attempt failed so it's a very risky investment for a manager to take ownership as partial compensation especially if they don't already have a lot of knowledge and experience in this type of business or very similar ones (candy shop, smoothie shop, maybe coffee shop). It does narrow down where you should probably be looking, I'd look for managers of existing shops of the types above and see if they're looking for an ownership position in a new venture. Secondarily to that I'd find a local franchisee group, they exist in most medium and larger cities, they'll be full of people looking for opportunities like this.
Bruce is right. Hire a manager. The other option is if you have a viable business model, set up franchising.
Given that this relationship would be long term, I'd suggest defining what you don't want in a business partner, as well as what you do want. That will help you recognize a business partner.
use social networks e.g linked-in,Facebook...and also past advertisement in local news paper
Choosing a business partner is probably the biggest challenge for a small entrepreneur. During 45 years in business, I have seen very few successes and many disasters (many times ending up with the death of the company. I would reconsider the suggestion of Bruce Herman.
When hiring a manager, a key question is "does that person share my values and purpose?" P.
Very tough question.I have had people say to me God drove me to this opportunity and meant every word he said.He tried to steal my company.So, the point is luck sometime has a greater part than you might think. The fellow who said that was serious competent, borderline genius and for a while seemed the perfect CEO.I had decided to never give give cheque signing authority to people that did not have my name on the cheque. This CEO even worked a period of time for free.He brought in a big wig from CFO from a major international company. Two months after I finally relented and allowed to people other than me to sign the Cheques; they bonuses themselves $75,000.00. The moral tough to find and trust.You keep control.
First make sure you understand your own strengths and weaknesses, and look for a partner who off sets some of your weaknesses ands you offset his..ie Someone who is comfortable in Sales and Marketing and likes making calls, and someone who understands the outside but is more comfortable on the inside...Again looking at a business from the outside in, and a partner from the inside out so to speak...If you know your costs and have projected sales, you can advertise and see who responds, just be sure if he/she partner understand expectations and determine the ground rules for your relationship...
Have you considered opening your 2nd store as a franchise with you the franchisor? Instead of a partner or manager you have a franchisee who manages the store as their own business (the ownership you;'re looking for) but according to your business model. It's a bit more complex--probably some legal issues to consider but it's very common for food shops & quick dining businesses. You'll find the kind of partner/manager you're looking for and if it works you can replicate the process for your next store. Check out the International Franchise Association (www.franchise.org) for more info.
Why not Franchise your business then seek to multiply it through a franchise estate agent?
Few options :
1. Place an Advertisement in publication meant for specific Industry.
2. You can even give a presentation of your business and seek franchise, business partner or contract Agencies in the Business Forum..
3. Try to find some Consultants / Lobbyist who can get you a better deal.