21st Century Entrepreneur Opening Show Aired Friday October 3, 2014
A Discussion on How to Explode your Business through Partnerships.
This Friday October 3 will be the debut of the “21st Century Entrepreneur” which is an Internet radio program aimed towards educating business owners and their advisors on how to make their businesses more successful and profitable. It is a show hosted by JC Maldonado who is the CEO of BizGro Partners, a Business Development Firm that helps small and midsize companies grow, expand, and transition. This week we will be interviewing lifetime entrepreneur Lonnie Sciambi aka “The Entrepreneur’s Yoda.” Lonnie has over 30 years of experience in the entrepreneurial trenches as a founder, CEO, turnaround specialist, and advisor to small businesses in over a dozen industries. He has recently published a booked entitled “Secrets to Entrepreneurial Success,” and has valuable insight on how to grow a small business based on real world experience. The topic we will be covering is how to utilize business partnerships as a strategy for expedient growth, which is a strategy that is overlooked and misunderstood by many business owners. Below is some background information on a topic we will be covering in detail during our interview with Lonnie.
The Different Types of Business Partners
Partnering in business is one of the keys to success. In fact, partnering is the one strategy one can implement immediately to offset one’s weaknesses. The concept of a 100% owner of a company is a scary thought. When I hear it, the first word that comes to mind is “limitations.” There are some cases where a sole owner of an enterprise can make it big. Nevertheless, many of these sole owners pay large sums of money to managers, employees, and salespeople to remain sole owners. Further, being a sole owner generally means you have not raised any significant money for your business to grow because you own all the shares. Hence, you would have probably been, under these circumstances, a 100% self-financed company. If you are a 100% owner of a company, and you want to grow, I want you to consider partnering. Here are the different types of partnerships to consider:
A traditional partnership simply means you will share ownership in your business with a 3rd party. Ownership can be shared in a C or S corporation, an LLC, or any other entity that is formed to operate a business. Typically these ownerships rights can be granted for an exchange for money, a future promise to fund growth activity, and or the knowledge, skills, and labor that party brings to the business. The key to developing a successful partnership in this realm is to partner with someone who has skills and strengths that are different from yours. In fact ideally, you would want your partner to be strong in areas in which you are weak. Further, you want your partner to be committed to the business. This commitment can fuel the growth of the business. Finally, each partner’s roles and responsibilities must be clearly outlined. Without clarity, partnerships can run afoul.
Strategic Partnerships are a cooperative arrangement among two businesses to work together for the purposes of pooling resources and capital toward a profit making purpose. Both businesses in the partnership keep their own identity but will cooperate in the effort to sell a product or service.
There are 2 types of Strategic Partnerships:
A Joint Venture
A Licensing Deal
On the show we will discussing the distinctions between these two arrangements and how to put together a Joint Venture and Licensing deal.
A Financial Partnership is achieved when a business owner sells a controlling interest or large percentage of its company to a stake holder that makes a commitment to fund the company’s growth activities going forward. Typically the selling shareholders will remain as an officer, director, and/or in some sort of executive role that greatly influences how the company gets operated on a day to day basis.
What are examples of Financial Partners?
Larger Corporate Entities:
Venture Capital Firms:
Private Equity Groups:
Public Holding Companies.
Many business owners do not understand the distinctions and characteristics that these entities possess. This lack of understanding places the typical business at a disadvantage in working a deal with these potential partners. On the show, we will highlight how to communicate, negotiate, and work out a deal with the various potential Financial Partners that exist for your business.
Don’t forget to tune in to our show this Friday at 12 Noon so that you can receive insight on a strategy that can change your business life and how you think about the growth of your business. To plug into our show, just simply click the image below: