If You Are Desperate for a Loan, You Probably Shouldn't Get One.
Business loans are resourceful for business owners to finance new businesses, support new product launches and keep the business operational. But applying for a business loan isn't ideal when the decision is made in haste, especially due to a non-performing business partner or a business partnership that goes sour.
When you feel desperate to make a business decision, that is the time when you should proceed with caution. That's because you're more prone to making bad business decisions when you're desperate. The great news is that you can still handle making decisions for your business, even if you're not confident with your business partner or you have had a bad experience with a business partner in the past. Here's how you can make better business decisions even when you have doubts about your business partnership:
Change Your Mindset
Without the right mindset, you're setting yourself up for failure. Confidence is key when you're making sound business decisions, and when you have the right mindset you can make better choices despite your business partner's inability to add value to the company. Thus, it's important to limit your complaints and focus on solving the issue at hand. If you're opting for a business loan out of desperation to keep your business operational, understand that it doesn't solve the underlying issue. You have to think beyond patching up problems in the business. Instead, have a growth mindset and focus on your customers and employees while driving results. By focusing on the aspects of the business that help drive revenue, you can make better decisions to increase your bottom-line profits and keep your business going.
Before signing a contract for a business loan, always take the time to think about what terms you're agreeing to, why you're getting the loan and what you're doing to avoid relying on debt in the future to keep your business operational. Making sound business decisions calls for patience. So, take the time to think before making any hasty business decisions.
Bring in Help
Making the right business decisions when your business partner isn't performing doesn't have to be a solo job. Instead of hopping on the "bad decision" bandwagon, get the help you need and leverage the help of professionals to assist you with making decisions for your business. One of the most important decisions you'll need to make will be related to your taxes. This becomes especially important if you decide to make a significant change to your business, including changing the allocation of shares in your partnership to improve the strength of your loan application. That's why it's important to consult with expert tax preparation and consulting professionals, such as Honest Buck Accounting. A team of tax professionals can help you map out the tax implications of making these types of changes so you can avoid making poor decisions that can hurt your business.
Consider Changing or Parting With Your Partner
If your business partner is holding you back, then it may be time to explore changing partners or parting altogether. While business partnerships offer several benefits, such as complementary skills and tax benefits, they can also have several disadvantages, including joint debt liability and differences in values and money management. If your issues can't be resolved, then dissolving the partnership may be an ideal option. Just ensure you seek legal counsel and take the steps to prevent poor partnerships, such as creating a strong partnership agreement.
Whether you've had a bad past experience with a business partner or you're just not confident in your current business partner, you still have to make sound decisions if you want your business to thrive. By putting these best practices into action, you can maintain operational efficiency for your business and improve your profits without making hasty business decisions.