Zero Down Partnerships an Entrepreneurs Key to Starting a Business
Zero Down Partnerships an Entrepreneurs Key to Starting a Business
Get a Roof Over Your Head! Create a “Facilities” Partnership
It takes a creative person to identify partnerships that having nothing to do with sexy marketing activities, costly joint development efforts or global market penetration plans. Perhaps a better word would be smart. In this day and age, the smartest partnerships seem to be created by those faced with the biggest challenges: i.e., no money. Partnerships for those with no money are some of the most lucrative and strategic partnerships around. And believe me, they are real and are being created every day.
Take facilities partnerships. This is probably the least sexy type of partnership possible, and yet it is one of the smartest. It just happens that only those with little or no cash think to use it!
For instance, Espresso Connection, a gourmet coffee provider founded five years ago had no money for high-rent space in malls. Yet it knew its target market spent hours in shopping for far more costly items. Wisely, the founder and CEO Christian Karr approached several mall owners and managers to determine if they would ‘partner’ designed around a percentage of profits. The space in question was extra or non-rentable space. No risk for the building manager since no money was being made on the space anyway, and high returns if Espresso Connection was successful.
I’d no idea Karr’s coffee stands make a quarter of a million dollars per year on average! A nice cut of this goes to the risk-taking partner. Karr got up and running with the facility space in under thirty days without a time-based contract, payment guarantees deposits or promising first born children to the landlord. Karr then leveraged this model for the first ten locations and has continued to use it for dozens more. His multi-million dollars business “could never have gotten off the ground or grown as quickly without facilities partnerships.” And he readily admits he wouldn’t have even approached the facilities partnership if he’d had the money to spend in the first place.
Trade Labor for Product Development: Utilize Engineering Partnerships
Second in sex appeal to facilities partnership is an engineering partnership. This is not a joint development but hard-core engineering. Sunstream Corporation, a manufacturer of recreational boat lift equipment tapped a third year engineering student to aid in next generation designs. The student came equipped with real-life experience, and was more than willing to take a share of the revenues from the designs if they came to life. Sunstream retained the rights to the designs and delayed hiring full time engineers.
According to founder and CEO Ken Hey, the arrangement worked out perfectly. “We were both incentivized to make it work, neither had any out of pocket expenses and the risk was very low.” What started out five years ago as a modest engineering partnership has blossomed into a multi-year effort. Hey continues to outsource aspects of the engineering, its own company growing to accommodate Hey’s business, one of the fastest growing firms in the northwest.
Contrast this with the majority of engineering partnerships that are more akin to a vendor project. These do a disservice to both firms. Neither are incentivized for a long term goal, both face high risk if the outcome is not acceptable (loss of product for one and loss of fee for another) while pressure to control costs is at the forefront of everyone’s minds. Self-motivated partnerships don’t require a formal contract, even if one is used. These partnerships, particularly engineering partnerships, often exceed expectations for both parties practically guaranteeing a stellar product.
Consider the requirements of your organization, and how you can employ other smart partnerships. Other types include land partnerships, state and government partnerships particularly with municipalities and operations partnerships. Remember, it is possible to be creative and smart at the same time. Especially if you can employ wise partnerships while you have money in the bank.
Zero Down Partnerships an Entrepreneurs Key to Starting a Business - To learn more about this author, visit Sarah Gerdes's Website.
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Essential, not Elective Partnerships
Get a Roof Over Your Head! Create a “Facilities” Partnership
It takes a creative person to identify partnerships that having nothing to do with sexy marketing activities, costly joint development efforts or global market penetration plans. Perhaps a better word would be smart. In this day and age, the smartest partnerships seem to be created by those faced with the biggest challenges: i.e., no money. Partnerships for those with no money are some of the most lucrative and strategic partnerships around. And believe me, they are real and are being created every day.
Take facilities partnerships. This is probably the least sexy type of partnership possible, and yet it is one of the smartest. It just happens that only those with little or no cash think to use it!
For instance, Espresso Connection, a gourmet coffee provider founded five years ago had no money for high-rent space in malls. Yet it knew its target market spent hours in shopping for far more costly items. Wisely, the founder and CEO Christian Karr approached several mall owners and managers to determine if they would ‘partner’ designed around a percentage of profits. The space in question was extra or non-rentable space. No risk for the building manager since no money was being made on the space anyway, and high returns if Espresso Connection was successful.
I’d no idea Karr’s coffee stands make a quarter of a million dollars per year on average! A nice cut of this goes to the risk-taking partner. Karr got up and running with the facility space in under thirty days without a time-based contract, payment guarantees deposits or promising first born children to the landlord. Karr then leveraged this model for the first ten locations and has continued to use it for dozens more. His multi-million dollars business “could never have gotten off the ground or grown as quickly without facilities partnerships.” And he readily admits he wouldn’t have even approached the facilities partnership if he’d had the money to spend in the first place.
Trade Labor for Product Development: Utilize Engineering Partnerships
Second in sex appeal to facilities partnership is an engineering partnership. This is not a joint development but hard-core engineering. Sunstream Corporation, a manufacturer of recreational boat lift equipment tapped a third year engineering student to aid in next generation designs. The student came equipped with real-life experience, and was more than willing to take a share of the revenues from the designs if they came to life. Sunstream retained the rights to the designs and delayed hiring full time engineers.
According to founder and CEO Ken Hey, the arrangement worked out perfectly. “We were both incentivized to make it work, neither had any out of pocket expenses and the risk was very low.” What started out five years ago as a modest engineering partnership has blossomed into a multi-year effort. Hey continues to outsource aspects of the engineering, its own company growing to accommodate Hey’s business, one of the fastest growing firms in the northwest.
Contrast this with the majority of engineering partnerships that are more akin to a vendor project. These do a disservice to both firms. Neither are incentivized for a long term goal, both face high risk if the outcome is not acceptable (loss of product for one and loss of fee for another) while pressure to control costs is at the forefront of everyone’s minds. Self-motivated partnerships don’t require a formal contract, even if one is used. These partnerships, particularly engineering partnerships, often exceed expectations for both parties practically guaranteeing a stellar product.
Consider the requirements of your organization, and how you can employ other smart partnerships. Other types include land partnerships, state and government partnerships particularly with municipalities and operations partnerships. Remember, it is possible to be creative and smart at the same time. Especially if you can employ wise partnerships while you have money in the bank.
Zero Down Partnerships an Entrepreneurs Key to Starting a Business - To learn more about this author, visit Sarah Gerdes's Website.
Like this article? Share it with your friends
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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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