JPAbusiness

If you’re a business owner considering taking on an investing party or shareholder, some form of written shareholders’ or partners’ agreement is vital.

Use the agreement to make clear all parties’ investment and partnership intentions and responsibilities from the outset.

Remember, this is your business, so you can cover whatever you think important, from business relationships, ethics and cultural issues, to insurances, taxation and debt obligations; it’s your blank canvas.

A banker is not just a simple supplier to your business – they are a partner in your business.

In order to advance funds to your business, the bank must first assess a range of risks associated with your business. Based on that assessment, they then take a risk in advancing you dollars.

Yes, they take security for that risk, which usually ranks before your equity in the business, but ultimately their success in lending money is inextricably linked to your success as a business.

So treating them as anything other than a business partner is not doing the opportunity justice.

The following infographic sums up what you can do to give that partnership every chance of success.

If you’re a business owner considering taking on an investing party or shareholder, some form of written shareholders’ or partners’ agreement is vital.

Use the agreement to make clear all parties’ investment and partnership intentions and responsibilities from the outset.

Remember, this is your business, so you can cover whatever you think important, from business relationships, ethics and cultural issues, to insurances, taxation and debt obligations; it’s your blank canvas.

If you are considering taking on a shareholder or other investing party, it is very important you ensure there is some form of written shareholders’ or partners’ agreement from the outset.

Use the agreement to make clear all parties’ investment and partnership intentions and responsibilities.

In this video I explain why you should have a shareholders' agreement and some of the key issues that need to be covered off in the document.

If you’re considering selling your business and have decided against self-marketing, how do you evaluate the abilities of all the different brokers out there?

There are some obvious attributes you need to look for – experience is a big one – but your own attitude is actually a critical factor.

If you think of a broker as simply someone who takes commission for selling your business, you’re not likely to get value from the relationship.

Working with an advisor or broker can be a partnership, if you’re prepared to think of it as one and you choose the right partner!

I recently came across this article by US-based merger and acquisition (M&A) advisor Dave Kauppi. 

Since visiting the US about five years ago and meeting with a number of specialist advisors handling business transactions, I have regularly followed Dave’s blogs.

In this article, Dave compares the different approaches taken to selling businesses by business brokers and M&A advisors. The article is aligned to trends and activity in the US market, but it’s also relevant for the Australian small and mid-cap private business market.

Have you considered selling your business or taking on an equity partner?

We have a number of business buyer clients who are looking for new opportunities.

Our clients have specific requirements regarding business sectors and financials, plus preferences regarding location and scope to grow. 

If you've ever thought about taking on a partner or selling your business, read about our buyers and see if your business fits their requirements HERE.

The JPAbusiness team has recently received a number of separate requests from clients for advice on joint ventures, including a partial shareholding transaction (for succession, growth and exit).

Over the years we've been involved with setting up and facilitating a number of successful joint ventures, and we have also been called upon to sort out arrangements where things have gone wrong or haven’t been set up with adequate planning and foresight.