Business Partnerships – Getting Into Bed With a New Business Partner

Finding the right person to help build your business idea into a successful company is harder than you may at first suppose. Many of us decide to take on a business partner for a variety of reasons; most of which seem valid and justified at the time – even crucial to the successful birth and growth of the business. Few of us have the foresight to pause and consider the long-term implications of our decisions and choices – until it is too late.

What is an Ideal Business Partner?

An ideal business partner must not only share your vision and enthusiasm for the new venture, but should also add expertise in the areas in which you lack business skill or experience. An ideal business partner should be someone who understands the legal and financial responsibilities that come with sharing a business. But most importantly, an ideal business partner must be someone with whom you get along; someone who understands and shares your vision; someone who is on your ‘wavelength’ when it comes to making crucial business decisions in the future.

The first thing you need to ask yourself is whether you really need a business partner? If the answer is a resounding yes, then consider the following carefully: by taking on a partner you are in fact inviting a complete stranger into your life and entrusting them to share the closest details of your finances and your trust. You are handing over the keys to your business to that person. You are entering into a legal and binding agreement that holds far reaching consequences for yourself, your business and your life.

Before you invite someone to join you as a partner, consider these questions:

o Do you like this person?
o Do you have the same vision when it comes to business ideas?
o Can you trust this person – is this person ethical, moral and honest?
o Is this person essential to the success of your business – is this person qualified to assist you?
o What skills, financial backing or other contributions will this person bring to the table?
o Can you envision a long-term relationship with this person – will you still get on in six months or six years from now?

Before entering into a partnership, consider the advantages and disadvantages:

The obvious advantages of a business partnership are that, ideally, you will have someone to share the financial burden as well as the workload. You will also have the input of a fresh perspective on ideas, a sounding board to bounce new concepts off, and support when the going gets tough.
The main disadvantage of having a partner is that you can be held personally liable for your partner’s negligence or bad business decisions. This means that if your partnership is unable to meet its financial obligations, you may have to use your personal assets to pay off debts, even though you, personally, may not be at fault. If the partnership defaults on a loan, for example, the bank has the right to collect the debt from both partners. Another disadvantage of a partnership is that if one partner decides to leave the business, then the business may suffer, or even end.

A partnership is like a marriage in many important ways, requiring a high level of trust; and, as in marriages, divorce is common. Here are some tips on what to look out for in a choosing a suitable business partner:

o Observe the behaviour of your potential partner; research their business history, particularly regarding a trail of litigation, financial problems or fallouts with previous partners.
o Ask yourself whether you are compatible in temperament. Do you see ‘eye-to-eye’ on most issues? Do you have a similar business vision for your new company, or do you have radically different ideas on how things should be done?
o A potential partner should bring something of substantial value to the table – for example financial backing, special skills, or industry connections. Choose someone who complements, rather than duplicates, your own skills.
o Never underestimate the importance of actually liking your partner. Remember, it’s likely that, in future, you will be spending more time with your business partner than with your spouse or significant other.

Can A Franchise Finance Business Loan Be Creative? Here’s How Canadian Franchise Finance Works!

Is it actually possible to get ‘ creative ‘ when considering a franchise finance business loan for you new Canadian role as an entrepreneur in franchise financing? There are some tried and trusted rules we use in the franchise lending area, but a little creativity has never hurt anyone we believe!

If you haven’t considered how to finance your new business in the franchise industry then we feel it’s probably a little too late in some ways, as your ability to finance your business properly we think has a lot to do with the ultimate growth and success of your business. There are very focused lending sources for the franchise area of financing in Canada – the trick of course is to know what they are and more importantly how you can navigate the ‘ maze ‘ successfully.

The reality is that if you have some industry experience in your new business and a proper finance plan you have a much better chance of financing your business properly.

So, who can you turn to in terms of creativity and resources for franchise financing? Clients are amazed when we tell them the most creative partner in franchise financing in Canada is none other than the Canadian government!How could that possibly be? Simply because a program guaranteed by the government and administered by the banks could not be any more creative than this.

The program is the ‘BIL’ loan program, and it provides you with financing up to 350k for your new business. Are the terms onerous? Hardly! The essence of the program is a 5-7 year term loan, with great rates, limited personal guarantees, and some other elements of flexibility. If that isn’t creative then we don’t know what is!

Naturally all the creativity in a business loan of that type for your franchise finance scenario should not be reliant on just one lender – the other lender is someone you know very well. Yourself. That’s simply because when you look at the total financing of a franchise in Canada the two components are simply debt (the funds you have borrowed) and the equity, or money you have put in yourself. These equity funds, i.e. your commitment to the business, typical come from savings, the proverbial ‘ friends and family ‘ support, and investments or collateral that you have available.

Getting back to our key subject of creativity, our above noted BIL loan program only covers certain aspects of a franchise finance scenario. You can augment that loan with flexible equipment financing that has low down payments and extended amortization terms, as well as, in some cases, a working capital term loan.

We never forget to remind clients that the franchise financing plan is a two stage process, acquiring the business, and making sure they have some capital and funding to operate and grow their new business.

Find A Business Partner

Tired of going it alone? Is the burden of making all the decisions, providing all the financing and working continuously more than what you anticipated? Or perhaps you’re missing key elements for your business such as assets, skill sets, products or services that could propel your business to the next level. All these reasons and more are enough to hinder the growth of a would-be successful business; therefore, finding a business partner could be the answer to your predicament. The primary reasons, I believe, one seeks to find a business partner is to maximize profit while minimizing risk and effort. I know you’re probably thinking of the old adage which equates partnerships to marriages and we all know how a lot of marriages turn out. But unlike a marriage, a good partnership is not built on emotions and feelings but sound analytical judgment. If executed correctly, a good partnership will add value to your business.

Partnership or Strategic Alliance

Don’t worry a partnering agreement doesn’t have to be a lifetime commitment. In fact, you can and should create a strategic alliance as a way of testing the viability of the potential partnership before you sign a contractual agreement to form a partnership. A strategic alliance by definition is usually less formal and typically has a specific end date. You can develop a strategic alliance with a business or entrepreneur. It can be for a specific project, task or the obtainment of a particular product or service. Developing a strategic alliance first, will allow you to test the arrangement before determining if something more lasting can be established.

SBA Pilots Small Business Teaming Program

Another form of collaboration is “Teaming”. Teaming agreements are for the express purpose of working on a specific project or bid. It allows small businesses to pool their resources for projects or bids too large for one business to handle. The federal government believes so strongly in this, that the Jobs Act authorizes the Small Business Adminstration (SBA) to “make grants to eligible organizations to provide assistance and guidance to teams of small business concerns seeking to compete for larger procurement contracts.” The SBA Office of Government Contracting is executing this provision by asking qualified organizations (for profit and non profit) to compete for the grant funding. Recipients of awards made under this Announcement will be expected to help small business concerns “find other firms that may be interested in teaming with them, assist small business concerns with the formation and execution of teaming arrangements, aid teams of small business concerns with identifying appropriate larger contracting opportunities, and assist teams of small business concerns with the preparation and submission of bids and offers”.

Tips for Developing a Partnering Alliance

1. Develop a Plan – first, you must determine your company’s value and the value you want from the alliance partner. You can accomplish this by outlining your strengths and weaknesses. Knowing what you bring to the table and what you want from the alliance partner helps you develop a strategy.

2. Identify the Right Partner – once you’ve identified an alliance partner, perform your due diligence to determine if the alliance partner is the right fit. Determine the alliance partner’s:

• Objectives
• Financial Position
• Core Capabilities
• Company Culture
• Tangible and Intangible Assets
• Operations and Processes
• Legal Liabilities (if any)

3. Develop the Agreement – Joint Ventures and partnerships will usually require a more formal contract than a strategic alliance. Consider the following when developing an agreement:

• Legal structure
• Equity interests of each party
• Initial capital and any commitments to future financing
• Voting structure
• Decisions requiring consent of the partners
• Commitments to provide technology
• Non-compete undertakings
• Broad scope of any warranties/indemnities
• Basic exit provisions
• Condition standards
• Target timescales

4. Performance Measurements – develop accountability measures with a timetable for goals and benchmarks.

Whether developing a partnership, joint venture, strategic alliance or teaming, it’s always good to consult with your attorney before signing the agreement.

Finding the Right Business Partner

One of the major challenges facing entrepreneurs and business leaders is finding the right business partners. Great care should be exercised when selecting associates because the right choice can bridge gaps and assist in the execution of your business plan. The wrong choice can harm the reputation and earnings of your company. One should consider the following
when forming strategic alliances:

Find Believers in Your Mission

No one will champion your cause like a true believer in your vision, products, and services. Align yourself with those who comprehend the magnitude of what you are doing and will offer wholehearted support to your endeavors. Those who align themselves with you solely for monetary gain will often carry a short-term perspective that will conflict with your long-term business strategy.

Active Partner vs. Passive Partner

Another consideration is: Are you looking for an active or passive interest holder in your business? Do you seek someone who will be involved in the day-to-day management of the company? Many entrepreneurs opt for passive partners to avoid having them encroach on the management of the business. If you elect active partners, it is important that they share
the same vision, objectives, and ethics as your associates.

Smart Money vs. Silent Money

When pursuing financial partnerships, you have several options. You can choose investors that will solely provide financing, or you can partner with funding sources that will also offer guidance and help in strategic planning. Silent monëy could be the right choice if you have a seasoned management team and desire total creative control. However, if in both cases you will surrender the same amount of equity, it makes more sense to
partner with investors who are well connected and may also offer advisory services.

Complementary Skill Set

Your ideal operations partner will have a complementary skill set. They will strengthen your areas of weakness and allow you to compete effectively. Their affiliation will most importantly shorten, or eliminate altogether, the development time necessary in particular areas. Your resources will not have to be spent acquiring expertise in areas where your partner is already adept.


Your ideal partner should also be in a position to help you förm strategic partnerships. This person/organization ought to be able to help you align yourself with people who can assist in growing your business. Strategic partnerships can also bring about needed political affiliations.

Growth and Exit Strategy

A major point of contention for many partners is the company’s growth and exit strategy. Some parties may be content as the owners of a small business, while others seek to franchise or even go public. All parties should be in agreement on how they plan to access the equity of the company, rather it be by salary and dividends, or a substantial liquidity event.

The right partner can ease the road and multiply the profïts of your business. Whether you’re looking for investment funds, advice, a complementary skill set, or helpful associations, choose this relationship wisely.

Business Acumen – Buying Out a Small Business Partner

Looking for buying out a partner generally refers to businesses searching for information on how to purchase the shares of another partner. Partners may decide to leave a business if they are retiring, relocating, or otherwise can no longer take part in the business’s activities.

The first step in buying out a partner is to determine how much the partner’s shares are worth. This can be determined a number of ways. Value could be based on the market value of the company, the amount invested by the partner, or a pre-determined price detailed in a partnership agreement.

The next step when looking to buy out a partner is to find capital to finance the buy out. Though most lending institutions do not provide loans specifically for buying out a partner, they do offer loan programs that can be used towards any general business purpose. Most buyouts require large sums of money, and to apply for a large loan, lenders usually require personal and company financial documents, a business plan, and credit reports. Collateral is also required for secured loans, which can provide lower interest rates than unsecured loans.

If a business is looking to replace a partner, it may be able to obtain funding from an investor. Partner investors contribute large sums of capital in exchange for a portion of the business’s profits and a voice in the business’s decisions. In the case of buying out a partner, an investor could purchase the shares of the leaving partner and become part of the business.

Small business buying out partner usually refers to small business owners searching for information regarding buying out another business partner. Partners may wish to sell their shares of a company when they retire, relocate, or otherwise can no longer take part in the business’s activities.

The first step in buying out a partner in a small business is determining the value of the partner’s shares of the business. To resolve this problem, many businesses with two or more owners create and sign a partnership agreement that predetermines the value of every owner’s share of the business. For partnerships that do not have an agreement like this, the value can be determined by looking at how much the partner invested in the business or how much the business is currently worth on the market.

Once all partners have agreed on a selling price, the owner buying out must find financing. Most lenders don’t offer loans specifically for buyouts, but their loans can usually be used for any business purpose. Buyouts typically require large sums of money, and lenders have more extensive requirements for large loans. To get a lowered interest rate, many borrowers use personal or business assets to secure the loan.

Another source of financing for a small business buying out a partner is another investor. If a business owner can find an investor who is willing to purchase the other partner’s shares, then the owner will not have to take out another loan. The business owner simply gets a new partner to work with.

Finance Ministry speaks against offshore ban

The Latvian parliament on February 1 passed in the final reading the legislative amendments banning companies that are registered in low-tax countries, or the so-called offshore countries, from taking part in public tenders in Latvia.

The Finance Ministry, the Procurement Monitoring Bureau and legal experts reviewed the parliament’s decision and concluded that it was inconsistent with the international law.

“One cannot impose restrictions on business activities of a company based solely on its domicile,” Reizniece-Ozola said, adding that it would be different in case of tax evasion or money laundering but the country of incorporation alone cannot be the reason for declaring a company ineligible in public tenders.

The Finance Ministry is working on a report explaining its argumentation that it will ask Latvian President Raimonds Vejonis to consider before promulgating the bill.

“If the President promulgated the law, there will be litigations because those legislative amendments amount to discriminatory treatment of companies,” the finance minister said.

Unity and the Union of Greens and Farmers support the proposal by their partner in the ruling coalition, the National Alliance, to ban offshore companies from participation in public tenders in Latvia but are concerned about the proposal’s compliance with the EU directive.

The Latvian Chamber of Industry and Commerce supports the proposal to ban offshore companies and Latvian companies controlled by offshore companies from participation in public tenders.

Government moves to tighten up Latvia’s sanctions law

The draft law establishes the time of coming into force of national sanctions, provides for taking sanctions into account in public procurement, mandates the need for setting up internal control systems, supplements the list of competent institutions and creates their right to impose penalties for deficiencies in the internal control systems.

The amendments “are necessary to address the shortcomings identified during the implementation of the law, to improve transparency of the legislation governing sanctions-related issues, and to bring the Sanctions Law in line with international requirements,” the government said in a release.

Amendments to the Sanctions Law still need to be adopted by the Saeima, and in an unusual move that underlines the urgency of the action, the cabinet said the law “is expected by the end of the current parliamentary term”. The next parliamentary elections take place in early October, meaning it is planned that the law should be passed within the next three or four months.

Once passed, all natural persons and legal entities will be under an obligation to comply with and execute sanctions that are in force in Latvia and indeed will have a duty to prevent the violation of sanctions.

The draft law also lays down that national sanctions imposed by the cabinet on persons come into force immediately – on the date that the Prime Minister signs the Cabinet Order containing the list of subjects of sanctions. This instant application should help prevent the subjects of sanctions having a chance to move their assets before sanctions come into force.

The draft law also adds the State Revenues Service (SRS) and the Consumer Rights Protection Centre (CRPC) to the list of competent institutions, stipulating that the said institutions are in charge of control over financial restrictions and restrictions under civil law in regard to persons under their supervision as listed in the draft law;

Those under supervision by the Financial and Capital Market Commission (FKTK), the SRS and the CRPC are obliged to carry out risk assessment concerning sanctions, whilst those supervised by the FKTK are obliged to establish an internal control system. However, the duty to set up an internal control system on sanctions will take effect only on 1 May 2019 “thereby giving time to the supervised persons to make the necessary preparations,” the release said.

In future there will also be stricter application of sanctions in the field of public procurement, imposing an obligation to check whether candidates or tenderers have been targeted by any sanctions, as well as the obligation to provide for in public procurement contracts the right to unilaterally withdraw from the contract, should its implementation be impeded by sanctions imposed during the contract period. This provision will not apply to procurements or procurement procedures launched or announced before the provision takes effect.

Finance Ministry raises economic growth forecast for 2018 to 4%

Compared to the previous forecasts on which the 2018 budget was based, GDP growth forecast for 2018 has been raised by 0.6% points, and the forecast for 2019 by 0.2% points.

The economic growth is expected to accelerate because of the favorable situation in external markets and increased investment activity in Latvia as the flow of the EU funds grows, the ministry said. In 2017 Latvia’s GDP rose 4.5%, according to preliminary results, and it was the steepest rise since 2011.

The Finance Ministry expects that in 2018 and in a medium term there will be strong export growth, while investments are expected to rise 10 percent. Private consumption will also be a strong drive, promoted by a strong wage growth and further reduction of unemployment level. The gross monthly average wage in 2017 increased by 7.5%, and might grow 8% in 2018, reaching €997 a month, according to the ministry. The steep wage growth this year will be determined by the growing demand for employees, and significant increase of the minimum wage as of January 1, 2018. In 2019 the average wage is expected to grow slower – by 6%.

Consumer price level in Latvia in 2018 will remain at the previous level at 2.8%. The comparatively high inflation level in 2018 will be determined by the strong economic growth, increase of wages, and excise tax hike on oil products, tobacco products and alcoholic beverages, while in 2019 inflation is expected to drop to 2.4%.

The Finance Ministry’s macroeconomic forecasts have been developed based on a conservative scenario, assessing risks of internal and external environments. The forecast risks are upward and may ensure a steeper GDP growth than projected in the base forecast. On the other hand, there are a number of serious negative risks, including the low investment level in national economy. Reduction of the number of working age employees creates a pressure in the job market and stimulates further increase of wages that may influence Latvia’s international competitiveness. Among external negative risks, there are also geopolitical instability, political uncertainty and the high fluctuation level in the world’s financial markets.

Personal finance: Five ways to make the most of your savings

Working out how to make the most of your savings might not be top of your to do list right now – but it should be. Here are five easy tips to get your savings working as hard as you do.

1. Create a savings plan
You know that savings are important and perhaps you have a figure in mind of what you would like to have in retirement or how much money it is going to cost to put the children through university but you probably do not have a clearly defined finance plan in place.

Approach your plan by considering if your saving aims are short or long-term. If you’re saving for the short-term, planning a luxury holiday or buying a new car for example, you’ll want to have your money somewhere easily accessible such as in a cash ISA.

If you’re saving for a longer-term goal, to help children through university or retirement, you could consider investing in the stock market.

2. Understand investment risk
Your risk profile is the amount of risk you’re willing to take with your money and your capacity to deal with any losses. For example, if you lose some or all the money you invest, what effect would this have on your standard of living?

Every investment has some risks. Putting money in the bank means you won’t experience a fall in your investment. However, you could find that the buying power of your money reduces over time due to the impact of inflation. Putting your money in higher risk investments such as shares and property could potentially lead to higher returns over a longer period but you need to be aware of the risks involved.

3. Choose the right investment
Once you understand your level of risk start to look at your investment options. Do you want to stay safe in cash or go high risk or are you somewhere in between? The most common types of investments are cash, fixed interest, stocks and shares and property.

Cash: We’d suggest that you should have at least a rainy-day cash fund that is easily available for any unexpected expenditure such as a new boiler or if you can’t work for any reason.
Fixed interest investments: These are also known as bonds and generally pay interest for a fixed period. They are mostly considered a lower risk asset than shares.
Shares: There are different ways to invest in the stockmarkets from buying shares in individual companies through to investing in funds. If you want access to shares but don’t feel your nerves can cope with the ups and downs of the markets, you could consider a with profits fund.
Property: Bricks and mortar have been a popular form of investment although they offer no guaranteed returns.
4. Spread your risk
Consider putting your money in a range of assets so that you won’t be dependent on any one type. If there are fluctuations in the stock market and your shares don’t perform as you’d hoped, you’ve still got funds invested in a cash ISA or property for example that may give you better returns. Many funds will also spread investments across different asset classes to diversify risk.

5. Review regularly
Once you have your savings plan in place make sure you review it at least once a year. Not only will this help you to ensure your cash accounts are offering competitive interest rates but you can also review any underperforming funds.

If you’re not sure where to begin with your savings plan or want to better understand the options open to you based on your risk level talk to a financial adviser who specialises in working with GPs. They’ll be able to work through your plan with you, ensure it stays on track and that your money is working as hard as you are.

Racing Awards, Medals and Customized Gear for Runners

Running, whether it be a 5k with the family, a 10k for an extra challenge, or a marathon for the elite runners, can be a very exciting and memorable experience. Running is a very personal sport to lots of people, as it can be great exercise and can make you look and feel very refreshed. Tons of awards are given out to winners at races each year. For people organizing these racing events, finding customized and personal running gear can be difficult, as well as finding unique prizes for running champions. When orchestrating a race, you want to have a memorable competition. Medals and unique prizes can help to make the race more exciting. Participants can keep prizes as souvenirs, and remember the experience better because of a keepsake.
The most important souvenir a competitor can take home is a winning medal. Those are worn with pride, and showed to family members and friends. They are often hung on walls, or shown off where they can be seen. Of course, medals need to be personalized, unique, and specific. You cannot award a running champion with a medal that doesn’t recognize what it’s for. It is often a perfect idea to find a company that will provide you with customized prizes for winners. Often, you can ask for customized medals that include the date, the name of the race, and the name of the company sponsoring and orchestrating the event. That way, when people proudly show their winning medal to others, the people who made the event happen will receive the credit and publicity they deserve.

In addition to medals, running apparel and gear can be a great way to make the race more memorable. Unlike medals, gear is commonly worn and would be used often. Passing out swag, such as customized shirts, jackets, hats, and bags can be a great way to add to the excitement of the race. Races with their own gear are viewed as more unique, as they have customized logos and attractive designs. Shirts can be given out to families, and jackets can be sold at the finish line. Hats can be passed out before the race to keep the sun out of the athlete’s eyes. And, of course, bags can be kept forever and used for multiple occasions. Having the name and date of your race on these items can help to increase publicity and help the runners remember what a successful and memorable race it was. Customizing these mementos can help to define a great race, and will definitely help a race to be more exciting and enjoyable.