Business Partnership Fundamentals
I just recently facilitated a series of workshops on how to break into foreign markets. The number one question and the subject that all the attendees wanted to discuss, was:
How to find business partners in the new countries that could do the work for them.
When I asked them to elaborate on their thoughts, they gave me 25 benefits for themselves and how leaving all the work to the partners would minimize their risk. They didn’t allocate any benefits to the business partner.
It is about the benefits to the business partner (and not the benefits to you)
If you want someone to do something for you, then you can hire that person or engage that company, pay them for their work and keep the results for yourself. Getting people to do work for you against payment is a well-known and tested concept. Even when you are prepared to pay well, finding the right people, with the right skills, and the right attitudes is still no simple task.
Finding people or companies to do work for you without getting paid along the way is a tad more tricky. You need a compelling business proposal to motivate someone to spend their time and money promoting your agenda, only getting paid sometime in the future depending on circumstances that are not entirely within their control. On top, you are asking them to commit at a time where they have no experience with you and your products.
This business proposal: “Sell my unknown product (for which there is currently no demand) from my unknown company to new customers in this new market, and I’ll pay you a commission on the results” is not very attractive. It is essentially asking people to get paid with their own money.
Move to the other side of the table
If you are looking for business partners to assume the responsibility for certain portions of your revenue generation process, then you need to develop an investment prospectus. You need to explain why investing time and resources in being part of your ecosystem is a damned good idea for the business partner. And you need to translate this good idea into hard monetary terms. How much should she expect to invest, how soon can she expect to be cash-positive, when does she reach break even and what is RoI on a 3-5 year time line. How will you help make it happen?
Business development comes before sales
Ask someone on your team (or an external party) to play the role of the potential business partner and ask that person to be tough. As you develop your business partner value proposition, you should review the details with real potential partners. Ask them what they think about the various elements of you business partner program. Ask additional questions to understand what they mean. Don’t answer the questions, but collect enough information from 10-15 potential partners before you assess the feedback. One opinion is not always right.
Finding good business partners is hard
Even when you follow my advice finding business partners that are prepared to break a new market for you is hard. You cannot eliminate the risk, and most people are not visionaries and early innovators. You have to keep looking for someone with the right mindset and the resources to make your business proposal work. Be patient and keep looking. Saying yes to the wrong candidate (person or company) can set you back and cost your dearly.