How to persuade potential business partner into loosening purse strings

There is a list of reasons why first-time business owners reach out to potential partners. The main reason is capacity and financing limitations. A business partner is an individual or company with a degree of involvement in another entity’s business dealings.

This is a person you reach out to with the aim of interesting them into co-owning and, or, managing your new business.

Perhaps your new business is struggling with marketing due to financial limitations and you are angling to reach a wider network of potential customers that you believe are lucrative.

A business partner will come in handy at this crucial time and inject fresh financing for marketing and infrastructural needs.

Alternatively, your company has been awarded a tender to supply, for example, computer parts and your enterprise has limited liquidity.

In this case you could reach out to a business development manager working with a computer manufacturer and hammer out reasonable credit terms with her that will help you deliver in time.

Critical facts

Partnerships are essential if you are to take your entity to higher operational levels, boost capacity, do more marketing, renovate your brand, acquire a more classy business address, automate business processes, engage industry consultants, and hire more manpower hence smoothening business processes.

Sources of business partners include family networks, old college friends, financial institutions, investment clubs, donors, angel investors, the stock market, and general well-wishers who see the future earning capacity of your business proposal.

So, how do you wow your potential business partner with the aim of making them loosen their purse strings?

Most potential business partners are allergic to risk and uncertainty. They are sensitive to facts and need financial and marketing strategy details of your new entity before sinking in any cash.

With the aid of an accounts and IT expert, carefully model, package and communicate with clarity facts about the health of your new business entity.

Details of your daily, weekly, monthly and annual earnings are critical facts that potential business partners look for. Make an effort to show how viable your new business venture is. At this stage, it would be best to compile an easy-to-read business plan.

Do not forget to have projections of future earning of your new business entity.

In the same plan, clearly state what you aim to accomplish through your new business outfit. Potential business partners would also like to know what amount of resources are needed in order to make your dream come true.

They would also like to know how you plan to spend the cash if you qualify for financing.

There are a million and one business plan templates on the Internet, but remember to give out true and candid facts about your entity instead of copy-pasting estimates from the Internet.

A shoddy business plan will cost you the much needed financing. There exists a job opportunity supply gap in the global economy and no potential business partner worth his ilk would resist a chance to make a change in society by creating more employment.

Every billionaire would like to attach his name to any world-changing venture. Yet it is absurd underutilised money is returned to the Kenyan Treasury annually. Applications for financing in Kenya are lower than in European countries.

All hope is not lost though. With a clear and compelling presentation, you might be inches closer to clinching your much needed financing.

Do not forget to tell your potential business partners how much they will make from getting involved in your business. Are you planning to refund their seed capital?

If yes, after how long? At what rate of interest? How much control are you willing to cede to outside investors?

These and many more questions if answered well will help open up your business partner’s purse strings.

Gachanjah is a marketing consultant with Juhudi Investments Consultancy; [email protected]