Like this article? PLEASE +1 it! Evan Signature
Evan Carmichael Top Header
Share for a Cause









Partnerships: The Small Business Secret Weapon

Written by: Sarah Gerdes

Article Overview: Partnerships – Why do You Need Them? By Sarah Gerdes, Business Marketing Group, Inc. Whether you are a two-person firm or part of a global 50 organization, creating the right partnership is vital to successfully growing a business. This article is the first in a series of 5 articles that will walk you through the partnering specifics: Partnerships – Why do You Need Them?; Identifying and Validating the Right Partner; Creating the Partnership; Negotiating and Close the Agreement and Ending the Partnership.

Free Download - An Entrepreneur's Best Friend: The MyBizHomepage Financial Tools Dashboard By Sarah Gerdes
Name: Email:

Partnerships: The Small Business Secret Weapon

If you are an entrepreneur thinking about starting a business, or lead a small business, you need to know that partnerships were, are and will be an important element of a corporate strategy. And if you are devising high-growth strategies, you are probably already turning to potential partners for investments, joint development, co-marketing and distribution agreements.

• Why partnerships fail? According Booz, Allen & Hamilton, 75% of unsuccessful partnerships fail due to cultural differences and 63% fail to meet revenue projections. The result? 55% of all partnerships last less than 3.5 years.

• Partnering needs depend on stage of your company. Early stage companies require product validation to gain investment monies, while mid-stage firms desire distribution channels to drive revenue and late-stage firms seek branding and awareness to drive demand through the channel. Throughout this partner development lifecycle, a partnership with the right firm can dramatically accelerate these activities at the fraction of the cost. It is a rare that "one partnership fits all", since companies mature and can "grow out" of a partnership.

• Possible outcomes. Based on the objectives of the company (regardless of the size) it could include: joint development, co-marketing, licensing and distribution agreements and, last but not least, joint venture. Investments and acquisitions, one of the most desirable outcomes of the partnership, can happen any time.

Let me share with you two success stories: Ekit.com and Convergence. Ekit.com provided travel services for the business and recreational traveler and wanted to capture market leadership through distribution agreements. Several partner categories were evaluated and narrowed down to the highest producing partners based on revenue impact. In forty days Ekit signed a global exclusive agreement with Amtrak, yielding licensing and marketing agreements. Soon, every Amtrak counter had an eKit.com stand-up brochure highlighting its travelers package.

Convergence developed a wireless product based on Bluetooth technology and was looking for funding and product distribution deals. Based on several criteria, it selected Intel as a top partner candidate. As a result, Intel made an equity investment and signed a licensing agreement. This led to a introduction to Amazon.com, and forty-five days after the first meeting, Amazon.com acquired Convergence. All told, it was less than six months from the first strategic partner conversation to an acquisition. That is the power of a smart partnership.

Companies of all sizes and under any economic conditions always will be looking for partners for a simple reason: its hard to survive without them. Developing a product, bringing it to market, raising brand awareness and many other aspects of a company’s life is depends on its ability to create a strategic partnership in the appropriate market at the appropriate time. In my second article, I will talk about how to identify and validate the right partner for your organization.

Related Articles
  How to Breakthrough Your Glass Ceiling
  What a Leader needs to understand about the strength of water
  Power of Partnerships
  The Partnership Model for Growth and Profit
  Fusion Marketing: Two Businesses Are Better Than One

Home > Marketing > Sarah Gerdes > Partnerships The Small Business Secret Weapon
Article Tags:

About the Author: Sarah Gerdes
RSS for Sarah's articles - Visit Sarah's website

Sarah Gerdes is recognized as one of the leading partnership experts by Fortune, Inc. Magazine has represented governments, F50 firms and small businesses in forty-five industries. Learn her secrets to jump-starting revenue here.

Click here to visit Sarah's website
Dashed Line

More from Sarah Gerdes
Partnering Techniques for the Entrepreneur the First Pitch
The Power of Two Partnerships in the Manufacturing Industry
Building Your Business Top Ten Finding the Best Partner
The Scary Business of Partner Due Diligence
The Invisble Hand of Partnerships


Related Forum Posts
My entry My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
These maybe the coldest franchises out there: These maybe the coldest franchises out there: - Here are the worst 15 performing franchises in regards to having the highest Small Business Administration (SBA) loan failure rates. The list is dotted with sub sandwich shops, fitness centers and car shops. WORST FRANCHISE LOAN FAILURES Failure % 1 OBEE'S SOUP SALAD SUBS 55.56% 2 LADY OF AMERICA 41.94% 3 COUNTRY CLUTTER (BED & BREAKFAST) 41.18% 4 COPY CLUB 36.36% 5 ALL TUNE AND LUBE 35.71% 6 PICKERMAN'S 35.71% 7 PHILLY CONNECTION 35.59% 8 ROLY POLY ROLLED SANDWICHES 34.78% 9 COTTMAN TRANSMISSION 34.48% 10 HAIR COLOR EXPRESS 33.33% 11 LEE MYLES AUTOMOTIVE TRANSMISSIONS 33.33% 12 GODFATHER'S PIZZA 33.33% 13 SMOOTHIE FACTORY 33.33% 14 BLIMPIE 31.39% 15 GOLF U.S.A. (RETAIL GOLF EQUIP.) 30.77% Source: Small Business Administration, SBA Loan Performance Within Franchise Code for the Period of FY 2001 - 2005
Exclusive: Interview with Results Exclusive: Interview with Results - Hi Forum Members, I'm helping start up a Business Coaching and Consulting company here in Toronto, Ontario, Canada (a Subsidiary of RSC Business in Los Angeles). As a Research and Development Intern I am required to practice my listening and interview skills by surveying Small and Medium Businesses on thier Business. This Survey is designed by RSC Business to also assist the Business being interviewed more insight into their own business. I am looking to interview about 30 businesses across North America over the span of 3 months. At the end of these interviews I will be publishing a report of the results and they will be made available for free to the Interviewees. The Report data will include responses from a minimum of 100 interviews. I would like to extend this opportunity to members of the Forum. If you would like to have this short 20-30 minute interview conducted on your Business and you reside in North America please send me an email or PM. Please contact me at andy[at]jvprosperity[dot]com to arrange our interview and to get free access to the results when they are published.
Re: Biz Plan Competition Re: Biz Plan Competition - i just wanted to say that posting Small Business Events on CanadaOne is a great resource. Thanks Julie!
New Small Business Topic New Small Business Topic - Hello everyone, I'm on the lookout for new topics to add to my site. We just launched a Franchising section and are planning Human Resources section. Do you have any thoughts for a new section? Here's a list of what we currently have: Angel Investors Branding Bank Loans Business Coaching Business Plan Franchises (New) Insurance Legal Marketing Public Relations Sales Small Biz Loans Venture Capital


Recommended Article for You close

  How to Breakthrough Your Glass Ceiling

Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.



Featured Article


Bottom Footer
Share for a Cause












Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!
Name:
Email:
Popular Articles

Adapting to Technology and the Internet

The Importance of Master Data Management (MDM)

The True Cost of Employee Turnover

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.