Shareholders and partners – is your partner a contributor?

Traders Den

By PocketAdvisor

Often I spend my time helping entrepreneurs debunk the myths surrounding equity and joint venture partnerships, specifically in the context of supplier and contractor relationships.

In other words, you need to assess first and foremost why you are seeking to engage with a partner. Now, this can take many forms, including shareholding and Joint Venture. Next, establish what your business will gain from the engagement.

Then look at whether alternative engagements is not better? Even if only from the outset for a while until you are sure about it. This could be engaging as a supplier or contractor. The difference is essential that a supplier render a service or deliver goods in exchange for a fee. Whilst a contractor will be engaged as a result of another agreement or project. When that ends – so will the engagement.

An agent or distributor engagement is also an option. An agent has the power to bind the principal and share in profits whilst the distributor is a reseller – moving product or service and sharing in the profits.

A Joint Venture (i.e. test run for anticipated partnership) is also a good idea. In simple terms, my grandmother always said marriage is not like buying horses. There are many mechanisms for dating before getting married in business.

So, it depends on the need and how to structure it best commercially. PocketAdvisor helps you navigate the minefield of collaborations and business growth strategies.


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