You've posed a very common question asked by budding entrepreneurs. I'll start by saying that a business partner and an investor are two very different creatures with different expectations of how their dollars are being used and what they realistically expect as a ROI (Return on Investment).
Traditionally, a business partner is an individual who invests in a business AND assists in the day to day operation of the company. They may work beside you, or their role in the business may be completely different than yours. Nonetheless, your talents and those of your business partner should complement each other. If your strength lies in marketing, your busines spartner might be a whiz in accounting or business development.
On the other hand, an investor normally plays no role in the day to day operations of the company. He/she simply invests funds with the expectation of a reasonable return on investment.
A business partner will generally be more forgiving of lack of profit because he/she is a bonafide partner. They usually don't want to take money out of the business too early, and expect early profits to be invested back into the company. On the other hand, and investor puts his money into a company purely for the profit. If the profit does not materialize within a specified period of time, or the profit is below his/her expectations (or below your overambitious quoted return on investment) the investor is likely to demand the return of his principle. He'll simply find a better investment opportunity.
It is currently very difficult to find investment capital. However, it will really depend on the nature of your company. If you have a profitable company in a growing sector, you should find a busines partner, although it will take some time. If your business is a work-from-home business, your chances of finding investment capital are slim. I can't emphasize enough the importance of having a product or service with broad appeal. If you are simply marketing to the Black market, then your business will be constrained both in growth and your ability to find an investor. Of course, there are exceptions. If you market black hair care products, your market will naturally be African-Americans.
Anyway, your first task will be to ask yourself "Why would I invest in this company"? "Why is this company worth XXX dollars in investment"? Be honest with yourself. If you have a number of companies, not all of them are of equal value. Focus on getting an investor/partner for the most promising ones. At that point, do some local advertsing, perhaps in one of the free classified weeklies. Set up a myspace profile for your company. You will get inquires of interest. Be patient. Results do not occur overnight. People may want to think about what you are offering and do a little research of their own before responding to your ad.
Let me know if I can assist you with wording for your ad. I'd be happy to help.
Thank you so much for this expert advice. I will consider this information as I move forward with my business goals. I have created an online magazine for prestigious African-American professionals with a purpose. My goal is to have a "one-stop-shop" of everything that goes on within the city. We provide new, concise, and innovative information. Exclusive! mag E-Zine launched October 1, 2008, and while it is still a work in progress, I would love feedback from you on the site. You can view it at www.exclusivemag.com. You can use the "Leave A Message" page to provide feedback.
Again, thank you so much for the sisterly advice. Have an exclusive day!
Replies
You've posed a very common question asked by budding entrepreneurs. I'll start by saying that a business partner and an investor are two very different creatures with different expectations of how their dollars are being used and what they realistically expect as a ROI (Return on Investment).
Traditionally, a business partner is an individual who invests in a business AND assists in the day to day operation of the company. They may work beside you, or their role in the business may be completely different than yours. Nonetheless, your talents and those of your business partner should complement each other. If your strength lies in marketing, your busines spartner might be a whiz in accounting or business development.
On the other hand, an investor normally plays no role in the day to day operations of the company. He/she simply invests funds with the expectation of a reasonable return on investment.
A business partner will generally be more forgiving of lack of profit because he/she is a bonafide partner. They usually don't want to take money out of the business too early, and expect early profits to be invested back into the company. On the other hand, and investor puts his money into a company purely for the profit. If the profit does not materialize within a specified period of time, or the profit is below his/her expectations (or below your overambitious quoted return on investment) the investor is likely to demand the return of his principle. He'll simply find a better investment opportunity.
It is currently very difficult to find investment capital. However, it will really depend on the nature of your company. If you have a profitable company in a growing sector, you should find a busines partner, although it will take some time. If your business is a work-from-home business, your chances of finding investment capital are slim. I can't emphasize enough the importance of having a product or service with broad appeal. If you are simply marketing to the Black market, then your business will be constrained both in growth and your ability to find an investor. Of course, there are exceptions. If you market black hair care products, your market will naturally be African-Americans.
Anyway, your first task will be to ask yourself "Why would I invest in this company"? "Why is this company worth XXX dollars in investment"? Be honest with yourself. If you have a number of companies, not all of them are of equal value. Focus on getting an investor/partner for the most promising ones. At that point, do some local advertsing, perhaps in one of the free classified weeklies. Set up a myspace profile for your company. You will get inquires of interest. Be patient. Results do not occur overnight. People may want to think about what you are offering and do a little research of their own before responding to your ad.
Let me know if I can assist you with wording for your ad. I'd be happy to help.
Denise van Esche
Progressive Urban Think Tank
http://groups.yahoo.com/group/P-U-T-T/
Thank you so much for this expert advice. I will consider this information as I move forward with my business goals. I have created an online magazine for prestigious African-American professionals with a purpose. My goal is to have a "one-stop-shop" of everything that goes on within the city. We provide new, concise, and innovative information. Exclusive! mag E-Zine launched October 1, 2008, and while it is still a work in progress, I would love feedback from you on the site. You can view it at www.exclusivemag.com. You can use the "Leave A Message" page to provide feedback.
Again, thank you so much for the sisterly advice. Have an exclusive day!