Thinking as a Shareholder in Small Business Expansion

Is there a difference between a partner and a shareholder when it comes to small business expansion? A shareholder is essentially a part owner in a company. If the company turns a profit, the shareholder also earns a profit. A shareholder wants the company to prosper so they can prosper as well. A shareholder takes on risk in hope of a larger return, and should hope for long-term results rather than short-term gains.

A partner in a small business can be described in roughly the same way. A partnership is “a contract between two or more persons who agree to pool talent and money and share profits or losses.” A member of a partnership should think of himself not only as a partner in the small business but as a shareholder in the company. A partner stands to profit when the company profits, and to share losses as well.
 
Partners should learn to adopt a shareholder mindset towards their small business: an expanded focus that reaches beyond sales growth, small business performance issues and small business expansion to embrace value creation of the small business. Taking on a shareholder mindset can help a partnership flourish. Partners should embrace the concept of investing in order to generate a return based on the risk taken, just as a shareholder does. 

To stay invested for the long term, partners, like shareholders, must trust the company’s management to be good stewards of their money. Without patience or trust, there can only be short-term objectives, since no one is prepared to take the risk of waiting for the longer-term to receive their payoff. Both partners and shareholders should think long term: owners of a small business are different than tenants, and prosper as such. Please contact us for more information about shareholders in a small business and small business expansion.