March 27, 2008, 7:00 am

How To Create An Alternative Source Of Income Part 2

by: The Financial Blogger    Category: Alternative Income
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– Who Is Your Best Financial Partner? –

In my quest to find $1,500 per month, I spoke with a lot of people in order to find out about innovative ways to create cash flow, company ideas and how to save money. At the end of this kind of discussion, several individuals will say something like:

partner

“we should start a business together someday”. There are two things to be careful about this line: the word “together” and the word “someday”. Today I want to speak more about the “together”, I’ll leave the “someday” for another post.

So you want to start a project but you are thinking it would be easier if you would have someone on your side to work with you. Working as a team could result into a great source of motivation and generate more ideas. But in order to be productive, you need to choose a good financial partner. Here are your choices;

Unknown investor

Those are individuals with resources (cash, knowledge, assets) who are looking for ideas or people to manage a project. They could be a friend of a friend or simply someone you met at your latest Happy Hour. You obviously have to be careful with this kind of partnership as they are some people living off the back of naive people.

If you want to go ahead with an unknown investor, I strongly suggest that you create a corporation and that you sign a contract. If you start on clear and solid basis, you will avoid a ton of problems in the future.

Friends

This is where I decided to look for when I wanted to start something. Friends could become really good financial partner as you know them; you know how they work and how they think. Therefore, there is less chance for surprises.

Communication is the key if you want to make sure to not jeopardize your friendship. If both of you constantly make sure that the other one is happy with how the project is managed, you should go a long way.

Family

I personally tried to do business with family members and it failed every time. The good thing is that each project failed before it even started. We just couldn’t agree on the plan.

I cannot really point out what was the source of the disagreement but the one thing I was sure of is that I didn’t want to start on the wrong foot.

Your Spouse!

Yep, in my internet project, I have two really important financial partner; my friend with whom we work together and my wife that supports me. More than that, she is a great source of motivation and comprehension.

In the day-to-day life, she is my major support. When you decide that you want to create a side project, it requires time, effort and energy. If your spouse is not on your side, you will never achieve anything.

I personally think that everything starts with a good financial partner and then, you can start designing your project.


image source : jazzadog

How To Create An Alternative Source Of Income Part 1

How To Create An Alternative Source Of Income Part 2

How To Create An Alternative Source Of Income Part 3

How To Create An Alternative Source Of Income Part 4

How To Create An Alternative Source Of Income Part 5

How To Create An Alternative Source Of Income Part 6

How To Create An Alternative Source Of Income Part 7

How To Create An Alternative Source Of Income Part 8

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Comments

I’m not sure what a “financial partner” is, but assuming you are talking about a business partner then I could not disgree more about your recommendation to seek friends. I have been in several businesses and least business schemes with friends and most have gone nowhere.

You have to seek people with resources. This is a must. If you just need more “workers” then you are far far better off hiring people. To make a business work you definitely need to put together the winning business combinations including skills, money, ideas, etc. Unless your friends also happen to have the resources you need to add to you own then you will just be putzing around.

Success in my businesses have only come once with a friend, and that’s because that friend had capital to add to my own and skills to add to my own. To get more capital we added a silent partner. The other skills we needed we hired. Over the last two years that has been a very successful endeavour. My other businesses with friends have failed because we just got together with roughly equal skills and few other resources. I’ve gone through it at least 3 times and each time was the same.

I agree with you that the spouse has to be supportive and able to tolerate the risks. My spouse is excellent in that regard.

by: The Financial Blogger | March 27th, 2008 (8:43 pm)

Doing business with friends it definitely not an easy task. However, if you have people with the good “resources” as you said in your entourage, it will definitely be a plus to work with a friend.

I did in the past and never regretted it so far. My latest partnership with my friend is just amazing. However, we are at our 3rd attempt to create something 😉

I have tried to run businesses with family members and my spouse. I found it pretty tricky as they just didnt have th drive and enthusiasm and positivity that I did. Maybe I am better off just continuing to work by myself!

A friend with something to add besides friendship is great. However the business does not succeed because of the friendship, it is due to the other assets brought to bear. I think that a friend without ambition or skills or money will always result in a failed business and probably a failed friendship because the investment is asymmetrical.

I’ve had it happen to me a few times where friends who were interested in doing something, but never put their time or money where their mouths were.

by: The Financial Blogger | March 29th, 2008 (6:31 am)

CR;
I think you just identify the problem. The key to success is definitely not friendship but what can your friend (as any other financial partner) can bring into your quest of making more money.

If the person you need to make your project live is a friend, it’s even better. But the opposite (starting business based on friendship) is really not a good idea.

[…] part 2 of my alternative source of income series I about people saying: “we should start a business […]

[…] part 2 of my alternative source of income series I about people saying: “we should start a business […]