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Business Plan InformationDocumenting Partnerships in Your Business Plan
by:
Dave Lavinsky
Formation partnerships to improve market penetration has become commonplace, particularly for “new economy” businesses. And, most companies with pride
mention their many an partnerships in their business plans.
The fact is that, regardless of whom the partnership is with, partnerships by themselves are meaningless. What are meaty are the terms of the partnership. For instance, spell it sounds great to have a partnership with a Fortune 500 company, the details of the partnership are what investors find important. For instance, investors wish look poorly upon a partnership in which the Fortune 500 institution earns 90% commissions on customers it refers. On the else hand, investors would-be look favorably upon a more evenhanded partnership.
As such, be sure to detail the specifics of the partnerships. This includes factors such as how the partnership wish work, payment terms, contract length, minimum and/or maximum guarantees, the type of client leads expected from each partner, temporal arrangement of payments, etc. In addition, if partnerships are a key part of the business plan, expect prudent investors to interview the partners and scrutinize partnership contracts.
Partnerships can be a major factor in the success of growing companies, providing leads, sales, capital and/or else critical benefits. However, ventures should be careful not to place too more emphasis on any one partner in their business plan. Partnership agreements, like else legal agreements, can be breached, and if the venture positions any one partner as critical to its success, this wish become a risk factor to investors.
Overall, partners can provide a great boost to growing ventures. Business plans should not only discuss who the partners are, but detail the terms of the partnerships and how they wish benefit the company. Finally, the business plan must not place too more emphasis on any one partner in order to win over
investors that the business is capable of success even as without it.
Just about the author:
GT Business Plans has developed over 200 business plans for clients that have put together raised over $750 million in financing, launched many
new product and service lines and gained competitive advantage and market share. GT Business Plans is the sister site of GT Venture Capital
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