Most new factoring brokers and business finance consultants start their new ventures solo, managing all various tasks of setting up, launching, and operating their new enterprise by themselves. For most, this is usually a 180 degree departure from working on a daily basis with others if employed an any large company. Without question, one of the most sought after characteristics of starting your own business enterprise is the ability to finally be your own boss and, good, bad, or otherwise, make your own decisions. But launching a consultancy as a factoring broker or consultant is like few other business ventures. Without question, the earnings potential is exceptional and is what draws most to the business from the outset. But to be successful as an independent consultant also requires a considerable number of operational and marketing skills that most do not initially have. These are skills that must be developed over time and while you will certainly have a few, almost no one enters the industry fully equipped with everything needed. But there may be a better way to not only get operational quicker, but to also become successful more rapidly. And, that is by carefully selecting a business partner for your consultancy with skills that compliment your own.
Though it is very easy to enter the factoring and alternative commercial finance industry with the intent of simply becoming an occasional or part-time referrer (agent), launching a business as a freelance independent commercial finance consultant or loan broker is something else entirely. With the help of a simple landing page, some basic training, and some very normal networking opportunities, referrers can not only succeed but actually thrive, working by themselves when and how much they desire. Full time professional consultants are typically quite different. Not only will they network on a much higher plain, but they will additionally utilize all types of direct marketing which will require various types of more advanced technology such as CRM setup and management, automations for drip marketing, marketing campaign creating, finely honed cold call prospecting skills, setting (and keeping) face to face appointments, so9cial media skills, and more. So rather than try to master all of the skills required for success as a full time consultant, does it make sense to carefully seek out a partner that comes equipped with skills that compliment your own and make up for those you lack? For some, that may provide the perfect solution.
Pros and Cons of a Consulting Partnership
To be certain there are some pros and cons of a partnership vs. going solo when it comes to launching a business in factoring and alternative commercial finance products for small business owners. They include…
- Pro: There won’t be conflicts about business decisions
- Pro: No commission sharing
- Pro: You will chart your own course
- Con: You need to do it all and develop new skillsets
- Con: Taking extended vacations and time off may be difficult
- Con: You have no “sounding board” or ability to get feedback on tough spending / investment decisions
Enlisting a Partner
- Pro: Two heads (decision makers) are often better than one
- Pro: You can delegate responsibilities based on expertise and skill strengths
- Pro: Partners capital contributions will help defray startup costs
- Con: You will be splitting your commission revenue
- Con: An eventual breakup can prove difficult
- Con: You may have strong disagreements regarding spending and tech upgrades
The Best of Both Worlds
For many intent on developing a factoring and freelance commercial finance consulting business, a “loosely structured” partnership rather than a formal partnership can provide a ready solution to the the drawbacks of a solo entry. Here, two or more individuals determine their compatibility as working partners, comparing the strengths and weaknesses of both. For example…
- Does one partner excel at lead generation, using direct marketing and prospecting to develop leads while the other excel at networking and actually going out on face-to-face appointments and land the deals?
- Is one partner a “detail person”, exceptional at organization and the setup and daily operation of a CRM and lead generation while the other acts as the front man (or woman) calling on local bank lending officers and accounting professionals to build solid referral networks?
- Since they will typically share commission revenue, do they both have similar work habits with each working similar amounts of hours?
- Can they fairly and equally assign the tasks associated with running the business?
The fact of the matter is, when it comes to launching a freelance factoring / business finance consultancy, unless you’re pretty unusual with solid skills in all aspects of the business developme3nt side of the industry, you probably will struggle in the early months as you learn…learn….learn. You’ll likely find you can’t do everything yourself. Even if you think you can, you’re likely to be less proficient in some areas than others so having a partner with complimentary skills can help you move forward quickly and begin earning a share of the factoring industry’s near-legendary residual commission income. . Of course, hiring experts and outsourcing tasks is always an option, but having “partnership” talent in-house can make things a whole lot easier.