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Joint Ventures Can Reduce Risks For Startups

There are many positive advantages ...

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Starting a business means some degree of risk. Most entrepreneurs will recognise that the skill is is reducing the risk as far as possible. I believe joint ventures are a good way to achieve that ...

A joint venture can be a great way to reduce risk for startups!

A joint venture can be a great way to reduce risk for startups!

copyright: alphaspirit / 123rf

Risk happens at all stages of a business, but the most risk occurs when you're in the process of launching your business. Entrepreneurs must first decide on the business structure for their venture:

  • Sole Trader - you're on your own so you take all the risk

  • Partnership - you share the risk evenly, but choosing a partner can bring with it risk of its own

  • Franchise - most of the risk has already been taken proving the business model, but you've still got the risk that it may not work in your area

  • Limited - Personal risk is reduced somewhat, but raising funds from an unproven business could be problematic

In a joint venture, there are many positive advantages that can reduce the risks from the outset, and subsequently, as you grow. Here are six for starters:

  1. A joint venture puts you in business with people who know about starting up businesses.

  2. In a joint venture, you're running your own business, but the backer is in the background with all the advice and mentoring you need when you need it.

  3. A good joint venture relationship helps you smooth out the roller coaster ride of outgoings and income and keeps your cash flowing.

  4. In a joint venture, you get the back up you need to free you up to get on with what you do best, which is growing your business. The risk of being too busy with all the admin is removed.

  5. Consider the other facts of life, like your mortgage, the household bills and your lifestyle. They're all at risk if you're in a startup that will take time to make a return. A joint venture can reduce that risk by factoring in your salary from the outset.

  6. In a joint venture, you have the security of having expert guidance from people who will always keep you up to date with your legal responsibilities.

Of course, another way to reduce risk when starting a new business is to team up with a great accountant, one that can guide and help you.

At Essendon, we believe in pursuing a refreshingly hands-on approach, and because of this, we enjoy long-term relationships with our customers.

We will often introduce collaborators and partner businesses to a client if additional skills such as marketing or knowledge of insurance are needed.

So, whether you're thinking about going into business and are looking for support from a virtual finance director, or you're an established family business seeking accounting expertise and guidance on tax, Essendon has the commercial attitude and knowledge you need.

"Our goal is to be your financial team, not just accountants!"

If you'd like to find out more about joint ventures and how they could be good for your business, then do give me a call on 01908 774320 or click here to ping me an email and let's see how I can help you.

Until next time ...

Business Godparent

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More about Roger Eddowes ...

Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.

Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.