This month’s theme is “Creating Business Partnerships.” Throughout January, my posts will be exploring the many ways that we create partnerships within our businesses and how to leverage them to grow our business.
“A business is successful to the extent that it provides a product or service that contributes to happiness in all of its forms.”
~ Mihaly Csikszentmihalyi
Sometimes two businesses will collaborate to create a product or service that helps a mutually beneficial target market. They each bring something unique to the project and then they share in the profits of that specific product.
Think of it like this: It’s kind of like if chocolate and peanut butter got together to co-create the peanut butter cup, resulting in what many would agree is an additively tasty product.
So, if you are thinking of collaborating on a project with a fellow entrepreneur, you want to make sure a few things are covered.
1. Is this a true chocolate/peanut butter match?
Are what you bring to the project and what your partner brings to the project a good match? Do they strengthen each other? Do they complete each other? Do they create value that a mutually beneficial target market would desire?
2. Are you both clear on what responsibilities you each will have?
You might be surprised how many partnerships have broken down because one party thought they were doing all the work and resented it. Before you start co-creating that product or service, be sure the both of you are very clear on what each of your responsibilities are.
3. Are you both clear on what the division of funds will be?
Do you both have a clear understanding of how the money that comes in will be divvied up? How much will be going toward production? How much will be re-invested into the product for marketing? How will the profits be divided between the partners? 50/50? 60/40? Make sure all of this is down in writing before starting work.
Collaborating on a product or service can be a great way to grow both your businesses, increasing visibility and credibility, as well. But, so it doesn’t fall apart, make sure you have the game plan agreed to in advance.