Help! I need financing: Wanna be a Partner?

Business consulting financing

I love working with entrepreneurs because they are gritty. They don’t like being told “no”. They love challenges and are usually willing to take wild risks to achieve their dreams. What all entrepreneurs should be cautious of is taking on a partner.

I’m not saying all partners are bad, but I am saying all partners are not good. I’ve meet many entrepreneurs who think taking on a partner is no big deal. This is why I want to share my 5 Rules Of Engagement with you. These rules are for entrepreneurs who are considering taking on a partner in their business.

Rule number 1: If you don’t have a business plan, you don’t need a partner.

Rule number 2: If you don’t have anything of your own invested in the business, you don’t need a partner.

Rule number 3: If you haven’t paid a consultant, attorney, or CPA regarding this decision, you don’t need a partner.

Rule number 4: If the only thing you need is money to be successful in your business, you don’t need a partner.

Rule number 5: If you haven’t done due diligence on other options for capital funding, you don’t need a partner.

The number one question I get asked when talking to entrepreneurs about partners is, “A friend of a friend has a lot of money; should I make him/her a partner?”

As you may have guessed, there isn’t a one size fits all answer to the question, but the universal truth is that taking on a partner is almost always more expensive than other options, extremely complicated, and can get ugly very quick. Before determining that cash from a partner will solve your business’s problems, it’s important to answer these 4 very important questions:

– What happened to the last $10,000 of cash that came into your business?

– Do you have a plan for the amount you are seeking?

– How does your business’s budget line up to the past 12 months of Profit and Loss Statements?

– What are your long term goals and revenue strategy?

If you do nothing else, please, please, please ask yourself this before taking on a partner: “Have you exhausted all the other ways to get capital?” Because partnerships can quickly become a horrible investment, you should at least consider taking on other types of financing like personal debt or investors. I’m not saying you need to take out $50K in personal credit cards, but you should be willing to investigate what life would be like if you put up some of your own money. This could be a home equity loan, a 401K loan, an IRA withdrawal or loan, or any other creative method of securing financing personally.

A client I met with a few years ago had a very interesting business model. He gave very expensive equipment to his clients and then charged them for the usage. They were very happy with his prices as the usage fees were below competitors pricing and he didn’t charge them for the equipment upfront. I’ve heard this called the “copier machine business model”. He was sure he would make money, but he was asking me for help in sourcing short term financing. Does this sound like someone you know? I was interested in his business model because he could show me and any other potential investor all the revenue streams that were already secured through contracts. The reason I’m sharing this client’s story with you is that he wasn’t looking for a partner in his business and he didn’t want a loan from a bank. He was looking for an investor he could pay back on pre-agreed to terms outside of a bank. It was part of his strategy to turn investments into streams of revenue. Oh, and most importantly, he could and did answer my 4 questions. He knew where his last $10,000 went. It went into new equipment. When I wrote him a check for $10,000 I was going to buy new equipment for contracts already secured and he had evidence for the revenue streams it would create. His profit and loss actually exceeded his budget over the last 12 months. And he already had a good handle on his short term revenue strategy.

If your business needs money, it’s very important to understand why before running after more money. Sometimes, more money can cause bigger problems. In fact, rarely does more money being invested in a business solve any problems at all (unless you’re Marcus Lamonis, of course). Try these 3 simple tasks before looking for external financing:

Step 1

Create a Cash Flow Utilization Report for the last 4 quarters. By quarter, it should show the total dollars that were deposited into your business (not necessarily all income) and where it all went. Some basic categories should be: COGS, Debt Servicing, Salaries, Rent, Capital Purchases, and any other category that is either over $1,000 or over 5% of your Cash Flow. Understanding where all the money went may seem tedious and cumbersome, but it will help you to realize where you went wrong.

Step 2

Create a Break Even Analysis for the next 4 quarters. By quarter, it should show much money is needed to make the business run with a very conservative revenue forecasting. Your salary should be included as an expense so that you can be compensated for working hard.

Step 3

Create a Revenue Strategy for the next 4 quarters. Your Revenue Strategy should describe how you plan to make money in the short term (as short as in the next 30 to 60 days) and in the long term (in the next 1 to 2 years or more, depending upon your industry).

I’ve reworded one of my favorite sayings: If you continue to do the same things you’ve always done, you will continue to be in the same place you are. You need to start thinking differently (making decisions based on different sets of data) before you can change and mature as a business owner.

What are some ways you have changed your way of thinking, after launching your business, to become more successful and mature in business?

© Individual Advantages, LLC. 2016

The post Help! I need financing: Wanna be a Partner? appeared first on IA Business Advisors.

Looking for help with Financial Planning & Budgeting?

< Older Post

Newer Post >

A blue piggy bank is sitting on top of a stack of wooden blocks.

How to Mitigate Financial Risk Using the S.M.A.R.T. Management System

June 9, 2025

In an increasingly volatile economy, businesses cannot afford to be reactive when it comes to their finances. Whether you're a startup founder, a growing enterprise, or a seasoned business owner, the risk of financial instability is real—and growing. At IA Business Advisors, we help companies proactively navigate these risks using our comprehensive S.M.A.R.T. Management System . S.M.A.R.T. is more than just a goal-setting acronym. It is a decision-making and execution framework that brings clarity, structure, and alignment to every part of your business. From six-week action plans to one-year targets and long-term strategy, S.M.A.R.T. ensures your financial operations support healthy growth and resilience. Understanding Financial Risk in Today’s Business Climate Financial risk is multifaceted. It ranges from cash flow disruptions and market shifts to internal mismanagement and over-leveraged growth. As Brian Smith shared on a recent Daily Influence podcast episode, unchecked growth can drive a company into bankruptcy. Scaling without intention—chasing fast growth without aligning the internal team and financial resources—leads to diluted communication, quality issues, and operational chaos. Mitigating financial risk begins by understanding that more revenue doesn't always equal more stability. True sustainability comes from building systems that support intentional, well-paced growth. The S.M.A.R.T. Framework in Action: Reducing Financial Risk Our S.M.A.R.T. Management System guides businesses in creating resilient, financially stable operations through: 1. Specific: Build with Intentionality Clarity is power. One of our podcast guests, Mike Heatwole (CEO of The Dala Group), emphasized the importance of sitting down to define what matters most—whether that’s paying down debt, investing in growth, or launching a new venture. When your financial goals are specific, your strategy becomes targeted and less prone to reactive decision-making. “If we don’t know what the goal is, how do we get there?” — Mike Heatwole, CEO of The Dala Group 2. Measurable: Track What Matters Many companies are blindsided not by invisible risks, but by unmonitored ones. We help clients implement tools to track cash flow, margin fluctuations, and budget variances in real time. Visibility into your financial health gives you the power to respond early and course correct as needed. 3. Achievable: Assign Financial Stewardship Risk is reduced when financial responsibility is distributed. Through teamwide financial literacy and clear accountability, we empower organizations to make stronger daily decisions. No individual person should carry the entire burden—and no key area should go unmonitored. 4. Relevant: Make Risk Management a Habit Quarterly or biannual financial health check-ins create a sustainable rhythm. These don’t have to be complicated—they just need to be consistent. Regular reviews embed risk awareness into your company culture and decision-making process. 5. Timely: Foster Honest Dialogue Financial silence is a hidden threat. As Brian noted on the podcast, emotions like fear or shame can prevent businesses from facing financial realities. We encourage honest, blame-free communication around financial performance, creating space for solutions and collective action. Case in Point: Short-Term Action, Long-Term Impact One of our clients, a family-run distribution company, had strong revenue but was bleeding cash due to aging receivables. Together, we built a six-week S.M.A.R.T. Plan focused on accounts receivable recovery. We implemented weekly check-ins, assigned ownership, and used real-time tracking. Within 90 days, their outstanding A/R dropped by 22%, freeing up capital and restoring operational confidence. It’s Never Too Late to Get Financially Intentional Many leaders in their 40s, 50s, or 60s worry they’ve waited too long. But as Mike Heatwole wisely shared: “It’s never too late. Just get started. Do something.” Progress—not perfection—is the goal. Start small. Build momentum. Take the next best step. This mirrors a concept we love from The Gap and The Gain by Dan Sullivan: measure progress based on how far you've come, not just how far you have to go. Final Thoughts: Make Financial Stability a Strategy Mitigating financial risk isn’t about a dramatic overhaul. It’s about consistent action, visibility, and intentional decision-making. With the S.M.A.R.T. Management System, IA Business Advisors helps businesses turn risk into clarity, fear into focus, and instability into opportunity. If you’re ready to start, we’re ready to help. Let’s have a conversation about what matters most to you—and build from there.

Enhancing Interpersonal Relationships for Toxic Workplace Recovery

May 29, 2025

Hello, team! Mary here, continuing our journey through the I in Team series, where we challenge and empower you to Find , Be , and Build Your Influence. One of the most common things we’re asked to help our clients with is toxic workplace recovery. This directly connects to the culture of the team, and while rebuilding that culture takes time and intention, it is absolutely possible. In fact, with the guidance of our I in Team approach and S.M.A.R.T. Management system, we’ve successfully helped more than 19,000 teams evolve into high-performing, values-based cultures. If you’re ready to take the lead and breathe life back into your team, we’re here and ready to support you. Practice Emotional Intelligence One of the most impactful steps you can take on your toxic workplace recovery journey is to practice emotional intelligence (the ability to recognize, understand, and manage both your own emotions and the emotions of those around you). Toxic environments are often the result of emotional disconnection, poor communication, unnecessary competition, and a culture that avoids constructive feedback. Begin by shifting your perspective: respond with empathy, ask thoughtful questions, and use “I” statements. These habits model two traits, emotional regulation and empathy, that influence how your team interacts and solves problems. Start small. For example, set a personal goal to give one piece of sincere praise or recognition per day. This is a S.M.A.R.T. goal, and it starts to reinforce positive emotional exchanges. Over time, this contributes to a psychologically safe environment where people feel seen and supported. Foster Open Communication Once emotional intelligence begins to take root, toxic workplace recovery is just around the corner. Open communication becomes more natural because when team members are aware of their own and others’ emotions, communication becomes seamless. The number one rule? Listen. Really listen. Without listening, communication is incomplete. Try implementing monthly influence partnerships—team pairings that rotate so members can get to know each other beyond surface-level roles. This creates connection and, when done with consistency (Timely), fosters trust across your team. Another way to build open communication is by creating a structured feedback loop. Clarify how and when feedback should be given—perhaps during weekly one-on-ones or monthly review meetings—and make sure all team members understand the difference between criticism and constructive feedback. S.M.A.R.T. feedback is Specific and Relevant, and when delivered with respect, it encourages team members to grow without fear. Lead by Example As we say throughout the I in Team series, everyone is a leader regardless of title. Whether you’re in the C-suite or just starting your first job, how you show up directly shapes the culture of your team. To begin, set some respectful boundaries rooted in your values. Let others know what you need to succeed and what behaviors support or disrupt your work. When disagreements arise, demonstrate what respectful disagreement looks like—calm, focused on solutions, and free from personal attacks. If your workplace has leaned into competition, shift the focus to collaboration. Collaborate on micro-goals, like shared tasks or cross-functional projects. Make the results Measurable and celebrate wins together (publicly, if possible). Consider S.M.A.R.T.-based team-building events (like problem-solving challenges or goal-setting workshops) to reinforce collaboration in a meaningful way. Final Thoughts Toxic workplace recovery starts with you. Every interaction, every word, every moment of listening is a chance to model what’s possible. Show up the way you want others to show up. If your team is struggling to rebuild or you need expert guidance, reach out . We’re here to help. Let’s keep influencing responsibly and positively together.