Should You Have a Finance Business Partner for Your Small Business?

Published May 17th, 2024 by River Point Capital

A staggering 50% of small businesses fail within five years. The main culprit is running out of cash and difficulties securing additional funding as the business struggles. These financial woes, along with issues like outdated products and fierce competition, could be significantly reduced with the right partner by your side.

Starting a small business is an exciting but challenging adventure. One crucial decision you'll face is whether to bring on a finance business partner. While going solo might seem appealing, a financial partner can offer valuable expertise and support.

Below, we dive deep into the reasons for having one. We explore how they can contribute to your small business's success. Read on for more insights:

Financial Expertise and Risk Management

You need a financial wizard on your team. A finance business partner brings a wealth of knowledge and experience. They can help you manage finances and cash flow effectively.

This way, they ensure you have enough money to cover expenses. You can also invest in growth and avoid cash shortages. They'll also be your risk management guru.

With the partner's help, you can identify financial pitfalls. These pitfalls include underestimating costs, failing to manage cash flow, or not having a plan for unexpected expenses. You can then make plans to fix them.

Think of unexpected costs, market fluctuations, or changes in regulations. Your partner will anticipate these issues. They'll also help you develop plans to navigate them smoothly.

Shared Workload and Increased Efficiency

Running a small business solo can feel like wearing every hat. You manage marketing, sales, and finances. It's unrealistic to think that these activities are manageable at first.

Without a partner to share the workload, tasks pile up, and deadlines get missed. Important financial details also slip through the cracks. This lack of efficiency can lead to costly mistakes, missed opportunities, and even burnout.

Don't wait until you experience these challenges to find a financial partner. Having them helps spread the workload. It adds to a more sustainable and successful business.

As your partner handles these tasks efficiently, they allow you to focus on running your core business operations. You get time to build customer relationships. With two minds working together, you can streamline financial processes faster.

Strategic Planning and Growth Opportunities

Looking to expand your business but unsure how to finance it? A finance business partner becomes your strategic financial advisor. They'll analyze your financial situation and identify potential growth opportunities.

You'll even have a roadmap to achieve these goals. The roadmap could involve securing loans or investments. It may also encompass developing strategies to increase profitability or exploring new markets.

Either way, your partner's expertise helps you make informed decisions. You'll know how to allocate resources and propel your business to the next level. The other party will also help you brainstorm ideas and refine your financial strategy for long-term success.

Improved Access to Funding and Capital

You might need funding to grow your business. But with limited borrowing options, this can be a problem. Luckily, with two sets of financials, your business becomes a more attractive borrower.

Partnering with someone with good credit or financial experience can greatly improve your chances. It can help you secure a business loan or line of credit. Your partner likely has established relationships with financial institutions.

They can leverage these connections to open doors. These connections help you negotiate better loan terms for your business. A finance partner brings expertise in forecasting cash flow needs.

With their help, you can also create sound financial models. They help you present a clear and convincing case to lenders. The case is your ability to manage finances responsibly and repay the loan.

Enhanced Accountability and Decision-Making

Running a business can involve tough financial decisions. As such, a finance partner can encourage a culture of accountability. They can also enable smarter decision-making as follows:

  • Financial burdens and decision-making are no longer on your shoulders alone
  • A good finance partner will ask questions, challenge assumptions, and ensure financial decisions are well-considered
  • Discussing finances openly with your partner fosters trust and transparency.

You can discuss risks and opportunities, leading to more well-rounded financial strategies. There'll be a reduced risk of impulsive choices or overlooking crucial financial details. And as you both collaborate, you'll have better financial planning and avoid costly mistakes.

Complementary Skills and Diverse Perspectives

Picture this scenario: you're a brilliant inventor with a revolutionary product idea. However, the financial side of things leaves you scratching your head. Thus, you need a finance business partner.

The financial partner brings a complementary skillset to the table. They fill in the gaps where your expertise might be lacking. You excel at the creative and innovative aspects of your business.

Your partner could handle budgeting, cash flow management, and securing business funding. Their help frees you up to focus on what you do best. The difference in viewpoints can also lead to more well-rounded decisions.

Building a More Resilient Business

Running a small business is not always smooth ride. Unexpected challenges and economic downturns can threaten even the most promising ventures. Having a finance business partner by your side can greatly boost your business.

It can make it much more resilient. Think of the partnership as having a safety net. Your partner's financial expertise allows for proactive planning and risk management.

In particular, they can help you predict problems. They can also help you make plans to survive financial storms. With a partner, you might create a healthy financial buffer.

You can also diversify your income or negotiate better terms with vendors. This team approach can lead to more creative solutions. It also brings better outcomes for your business.

Explore the Power of a Finance Business Partner with Riverpoint Plan

Taking on a finance business partner isn't a decision to take lightly. You should understand the advantages of doing so to make an informed choice. This way, you can determine if a business partner is the missing piece in your entrepreneurial puzzle.

If you're considering a business partner, count on Riverpoint Capital since we understand the challenges and opportunities facing small businesses. We offer business financing solutions to help your company thrive. Discuss your needs today and explore how we can empower your business growth.

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