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Business Plan InformationDocumenting Partnerships in Your Business Plan
by:
Dave Lavinsky
Shaping
partnerships to improve market penetration has become commonplace, particularly for “new economy” businesses. And, most companies with pride
mention their many a partnerships in their business plans.
The fact is that, regardless of whom the partnership is with, partnerships by themselves are meaningless. What are meaning are the terms of the partnership. For instance, patch 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 different hand, investors would-be look favorably upon a more just
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 consumer
leads expected from each partner, temporal order
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 different critical benefits. However, ventures should be careful not to place too more emphasis on any one partner in their business plan. Partnership agreements, like different 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 persuade 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 conjointly 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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