when two businesses partner with each other, what exactly does that mean ? I know its a stupid question but im looking to increase revenue and there is another business that i know that we can mutually help one another but im not sure if im supposed to expect compensation or if they want compensation. etc..
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I assume this is not a competitor, because there are anti-trust laws that frown on that. So I also assume it`s a business that compliments yours and vice-versa. I have never heard of one paying the other, but I guess you could in some compensation.
One company that I had was a manufacturer of accessories for vinyl siding for your house. So, I aligned myself with one of the larger siding manufacturers out there. As we got to know each other, we traded new leads, shared many of the sales reps, sometimes we shared tradeshow booths, (because of the common reps), etc. We refered them and they refered us. They ultimately struck a deal with Georgia Pacific, whose primary account back then was Lowes. As their vinyl siding sales grew exponetially, ours did too. Right place at the right time.
The type partnership you are asking, I also assume is still two totally seperate tax entities. Not a partnership that files a single tax return.
You could also do other things, I guess. Maybe share employees. One manager could run both places if close. Of fill in with help when shorthanded.
Offer discount programs for each other products.
Just a few.
so its more like sharing resources that generate revenue for both companies. right?
That`s actually not a stupid question at all. Instead, it brings out the
stupidity of modern corporate "jargon," and how it completely confuses
any sort of reasonable communication. A corporate "partner" is just
that, modern junk-slang.
I suppose the original intent was that two related businesses would mutually support one another`s efforts. So AT&T provides telecommunications capabilities, where Yahoo! provides Web organization, structure, and site hosting.
The SBC (now ATT) and Yahoo! "partnership" meant that neither company had to invest all that money in what the other already could provide.
To my way of seeing it, I think this type of "partnering" is a way to combine resources without a leveraged buyout, merger, or acquisition of the other company.
Of course at an enterprise level, it leads to some interesting problems when some outside company buys one of the partnering companies. :-) But at your level, I think it makes the most sense to think of it as you`ve said, a mutual exchange of resources to provide a better overall service to your similar customers.
I suppose the original intent was that two related businesses would mutually support one another`s efforts. So AT&T provides telecommunications capabilities, where Yahoo! provides Web organization, structure, and site hosting.
The SBC (now ATT) and Yahoo! "partnership" meant that neither company had to invest all that money in what the other already could provide.
To my way of seeing it, I think this type of "partnering" is a way to combine resources without a leveraged buyout, merger, or acquisition of the other company.
Of course at an enterprise level, it leads to some interesting problems when some outside company buys one of the partnering companies. :-) But at your level, I think it makes the most sense to think of it as you`ve said, a mutual exchange of resources to provide a better overall service to your similar customers.
Partnering with another business is a great way to increase revenues.
The goal is for 2 businesses to leverage each others strengths in a way that will benefit both parties.
One business might have a great product that can be marketed to the other business`s large customer list. Two companies might have complimentary products. Or two businesses might be market leaders in different niches or even different geographic areas.
The distribution of profits/negotiation of fees is largely dependent on how much each business invests in the partnership.
As an example...
Business ABC might propose that business XYZ market ABC`s product to it`s customers. XYZ creates the marketing material, XYZ contacts it`s own customers, and XYZ handles collecting all of the payments.
XYZ is offering a new and worthwhile product to its customers but it is obviously doing most of the work. Therefore they would likely get a larger share of the profits... maybe even all of the profits.
The benefit to ABC might be the acquisition of new customers to market to in the future.
The goal is for 2 businesses to leverage each others strengths in a way that will benefit both parties.
One business might have a great product that can be marketed to the other business`s large customer list. Two companies might have complimentary products. Or two businesses might be market leaders in different niches or even different geographic areas.
The distribution of profits/negotiation of fees is largely dependent on how much each business invests in the partnership.
As an example...
Business ABC might propose that business XYZ market ABC`s product to it`s customers. XYZ creates the marketing material, XYZ contacts it`s own customers, and XYZ handles collecting all of the payments.
XYZ is offering a new and worthwhile product to its customers but it is obviously doing most of the work. Therefore they would likely get a larger share of the profits... maybe even all of the profits.
The benefit to ABC might be the acquisition of new customers to market to in the future.
Partnering with business`s is one of the best ways to basically get free advertising.
For example we are in the process of partnering with a company that provides a internet shopping cart. Why? because we provide a product (internet merchant account) which basically requires a internet shopping cart. Vise versa, an internet shopping cart requires a internet merchant account in order to accept credit card payments from your customers. For most people, they buy internet shopping carts the same time as they do merchant accounts. this is going to cost both of our companies absolutely nothing however for every potential client they advertise their products to, they are also advertising us along with them and vise versa.
-------------------------
www.FormPay.com
Internet Discount Rate: 1.79%
Retail Discount Rate: 1.19%
For example we are in the process of partnering with a company that provides a internet shopping cart. Why? because we provide a product (internet merchant account) which basically requires a internet shopping cart. Vise versa, an internet shopping cart requires a internet merchant account in order to accept credit card payments from your customers. For most people, they buy internet shopping carts the same time as they do merchant accounts. this is going to cost both of our companies absolutely nothing however for every potential client they advertise their products to, they are also advertising us along with them and vise versa.
-------------------------
www.FormPay.com
Internet Discount Rate: 1.79%
Retail Discount Rate: 1.19%
Partnering with another business is a great way to increase liability. Partners are liable for the mistakes of each other - kind of like a husband/wife. One way around this is to be a limited partner.
-------------------------
James Lindon, Ph.D. Patent Attorney
Lindon & Lindon, LLC
Cleveland, Ohio
Patents, Trademarks, Copyrights, Pharmacy Law, Litigation
[this is not legal advice - provided for discussion only]
Intellectual Property for the Individual and Small Business: Identify, Protect, Enforce, Defend.
"Fools rush in where angels fear to tread."
http://www.LindonLaw.com
-------------------------
James Lindon, Ph.D. Patent Attorney
Lindon & Lindon, LLC
Cleveland, Ohio
Patents, Trademarks, Copyrights, Pharmacy Law, Litigation
[this is not legal advice - provided for discussion only]
Intellectual Property for the Individual and Small Business: Identify, Protect, Enforce, Defend.
"Fools rush in where angels fear to tread."
http://www.LindonLaw.com
I think that`s why I think "business partner" is one of those
junk-slang terms. A "partner" has a legal definition, and although it
might seem like sharing resources, mailing lists, and referring
products is a wonderful idea, it`s not a "partnership."
True, there`s a "sense" of the word, and that`s what we`re talking about here. But James has made a strong point, and something you`ll want to consider.
True, there`s a "sense" of the word, and that`s what we`re talking about here. But James has made a strong point, and something you`ll want to consider.
I do subcontracting ... like if I need something done that I don`t have time for, I pay another person for that part of the project but it looks seamless on the customer`s invoice.
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