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  • #965631
    promo123
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    Hi,
    We have been running our business successfully for the past year at home. Recently, we had taken on some new fixed costs such as moved to new office etc. Also, during the past few months, we had been experiencing lower sales which is not good.
    As for moving forward to the next level of business we have many different choices to go with for financing. Go for a business loan, find a business angel or partner up with our manufacturer.

    Could someone please tell me the pros and cons for each move.

    Thanks,
    Paul

    #1013133
    FletcherTax
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    Paul

    Couple of my initial thoughts

    Business Loan – you retain 100% control and interest charged is deductible

    Partner with manufacturer – how much control is lost? Will it be via a partnership/company/trust structure? Who will be responsible for things going wrong if it is a partnership? How will profits be allocated? Any restrictions, as to other suppliers or clients, as a result of this partnership? Pro – lower cost of financing; new clientele, better price margins for your stock/goods.

    Fletcher Tax Accountants
    http://www.fletchertaxaccountants.com.au

    Please note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.

    #1013134
    angelomichaels75
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    I totally agree with Paul.

    Its kinda difficult to differentiate between the two sides.

    #1013135
    rhanek
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    Hi Paul,
    your dilemma is difficult to answer definitively.
    And I obviously don’t know enough about your business at this moment, but from some of the things you mention in your question, I have to say that it sounds a little as if your business and you are not at the right stage to take on a business partner or angel investor or to take out a business loan. It seems that the business is struggling a little to meet its new overhead commitments and that the market for your business is not as secure as you might want.
    If that is the case you would want to be very careful taking on extra commitments and in all likelyhood an external investor or partner is going to be hesitant to come on board with you or they would not be paying you enough money for a share in the business.
    It sounds to me that you need to really knouckle down and get the foundations laid a bit more securely before you take on extra debt or commitments…. feel free to email me to talk about this.
    warmest,
    Roland hanekroot

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