Posted on: September 25, 2023 |
Starting a business alone isn’t always an option. If someone close to you is as enthusiastic about entrepreneurship as you are, a business partnership may be ideal for both of you. A vending machine business is a low-maintenance business option that can be ideal for busy entrepreneurs. Let’s take a look at how to start a vending machine business with a business partner, including what to look for in your business partner, types of partnerships to consider, and how to divide your responsibilities most effectively.
This blog post is not legal or financial advice. If you have questions about how to start, finance, or otherwise organize your business partnership, always consult with an expert.
How to Start a Vending Machine Business With a Business Partner
Starting a vending machine business with a business partner can be a great way to reduce the overall investment, time, and energy you need to start the enterprise. It’s important to find the right business partner, be clear about each person’s responsibilities, and make sure your business is legal and well-organized.
Find the Right Business Partner
Finding the right business partner or partners for your vending business can be a challenge. Knowing what to look for can help you find the right person, and recognize an opportunity if you meet them.
The right business partner(s) should have a few important qualities to start a vending business with you.
- Passion: It’s essential that your business partner is excited about starting a business. If they are reluctant, any obstacles you face may become bigger than they need to be. However, if you are both enthusiastic about entrepreneurship and starting a vending business, you’ll have more energy and willingness to problem-solve if things get tough, and expand when things are going smoothly.
- Skills, or willingness to learn: All businesses require skills. For a vending machine business, this can include accounting and money management, maintenance and mechanical knowledge, and marketing and outreach, among others. It’s ideal to find a business partner that complements your own skillset, or is willing, excited, and able to learn skills you might be lacking.
- Time: Though vending businesses, especially ice and water vending, are more passive than many other businesses, they still require some time for maintenance, bookkeeping, and business management.
- Agreeableness: To have a successful business partnership, you and your business partner need to work together effectively. Look for a business partner who is willing to listen to your ideas, weigh the pros and cons, and make adjustments to the business when necessary.
- Trustworthiness: In your vending business, you’ll be managing money together and dividing up business responsibilities. Make sure you partner with someone that you can trust and rely on to do their part and be honest about earnings, taxes, and other financial matters.
Talk About Start-Up Costs
Once you’ve found your business partner, you need to discuss ways to get your vending business off the ground. To do this, you’ll need to finance your start-up costs. There are many ways to go about this, and you and your business partner might each have different methods. You might try a traditional loan, personal loans from friends or family, or you might each leverage parts of your savings or other assets to get started.
Sharing start-up costs is one of the big benefits of starting a business with a partner. What might not be feasible for one person can be more realistic for two people together. Talk this over with your business partner and make sure you’re sharing costs in a way that makes sense for each of you.
Choose a Business Partnership Type
There are many different ways to arrange your business, and there are even different types of business partnerships. These different configurations are mainly based on the following features. Discussing these aspects will help you and your business partner find the right configuration for your business.
- Ease of creation: A General Partnership (GP) is the easiest type of business to create. You don’t have to file any formal documents for this type of business, and you can simply get started. Other types of partnerships or companies, such as Limited Partnerships (LPs) or Limited Liability Companies (LLCs), require filing certain documents with proper authorities in your state.
- Liability protection: Different partnerships or companies offer different levels of liability protection to different members. In a GP, for example, all members share liability equally. If something goes wrong, all members will have to participate in resolving the situation. In a LP, one partner will have more distance and liability protection, while another partner is considered the general partner, and will have more responsibility to resolve legal situations. Consult with a legal expert as you examine the different types of partnerships and companies you might start.
- Involvement: In some partnerships, different partners have different responsibilities. In a GP, for example, all partners may have equal involvement and responsibility. In an LP, one partner may supply investment funds, but otherwise their role in day-to-day activities is small. Consider each person’s level of involvement and responsibility, and how you want this to be reflected in your business arrangement.
As previously noted, if you create a General Partnership, you don’t have to file particular documents. However, other business arrangements require filing partnership documents, and there are other documents that you’ll need. For example, you’ll need to apply for an Employer Identification Number (EIN) from the IRS in order to file taxes and start earning money legally.
If you are taking out a loan to finance your business, you’ll probably also need business plan documents which clearly outline how your business works. Even if you are starting a GP and you don’t need to file documents with your state, it’s a good idea to create a Business Partnership Agreement. This document will help you and your business partner(s) resolve disputes, and outline a clear process for doing so. It will also show who is responsible for which activities, how earnings will be distributed between partners, how partners can withdraw from the business if needed, and much more. It’s critical to create a Business Partnership Agreement at the business’s inception, when all partners are thinking clearly and calmly, so you have a clear roadmap to avoid disputes later on.
Divide Responsibilities Clearly
Within the previously mentioned Business Partnership Agreement, you should outline who is responsible for which aspects of the business. Though ice and water vending machines don’t require restocking like other vending machines, there is still some regular upkeep to perform. It’s also important to outline who is responsible for financial obligations, like filing regular taxes and doing regular bookkeeping. It’s also important to perform regular maintenance, and spread the word about your vending machine.
Be sure that you and your business partner understand the responsibilities you’re taking on, and that you can discuss these responsibilities openly, and make adjustments, as needed. With clearly defined responsibilities, an organized plan, and partners who are passionate about entrepreneurship, your vending machine business will be set up for success.
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