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Shall we do something with another company?

4 parts, about 20 minutes. Your work saves itself in this browser.

Before you start: what you need to know

People in partnerships look for other companies to do something together that neither could do alone: a joint product, a promotion, an event. A good partnership benefits both, is measurable and is written in a clear agreement.

  1. The right partner

    The ideal partner sells something that goes well with our product (complementary), has customers similar to ours and compatible values. A direct competitor or a company with distant values isn't a good fit, even if it's big.

    For exampleAn independent bookshop can team up with a neighbourhood café: people who read often drink coffee. Not with another bookshop: they sell the same thing.

  2. The proposal

    A good proposal creates something new for both companies' customers, splits the work and can be measured (for example with one code each). Customer lists are never swapped: under the GDPR their consent would be needed.

    For exampleBookshop and café: "a book + a coffee" on sale in both places, with a different code to count who sells more.

  3. The maths

    You add up all the costs of one item, calculate the margin (price − costs) and split it as agreed. Then you multiply by the items you expect to sell. Hidden costs, like time, are left out.

    For exampleBox at €25; book €6, coffee €4, packaging €5: cost €15, margin €10, €5 each. With 100 boxes: €500 each.

  4. The written agreement

    Before starting you write down who does what, how costs and earnings are split, how long it lasts, how logos are used and who handles customer data. Exclusivity forever and verbal-only agreements cause problems. For contracts it's best to get help from a lawyer.

    For exampleThe bookshop and the café write that the partnership lasts until January and that each uses only its own customers' data.

Done reading, start part 1
1

Who do we team up with?

Before you answer

For each company ask yourself: does its product complete ours or replace it? Do its customers resemble ours? Are its values compatible with ours? If any answer is no, it isn't a good partner.

For exampleFor the bookshop: a board game company is complementary; a chain selling discounted books online is a competitor.

We've received or thought of five possible partners. Which are a good fit?

ItemA good fitNot a fit
An artisan bakery of organic biscuits, with customers similar to ours and 12,000 newsletter subscribers
An online shop of handmade ceramic mugs and teapots
Another online tea shop, with the same products we sell
A fast food chain with millions of customers
A "fat burner" supplements company

Why it matters. The right partner is complementary (it sells something else, to a similar audience), shares our values and brings something we don't have, such as new customers or skills.

2

Choose the proposal

Before you answer

A proposal works if it gives both a benefit, creates something for customers and can be measured. Discard the ones that ask for free favours, swap customer data or don't keep track.

For example"Put our logo on your website, for free" benefits only one; "A book + a coffee, with one code each" benefits both.

We choose the biscuit bakery. Which proposal do you send?

Choose the proposal

Why it matters. Co-marketing works when the value is for both and can be measured. And each company speaks to its own customers: contact lists aren't swapped without people's consent (GDPR).

3

Do the maths for the box

Before you answer

Do the maths in order, because each number is needed for the next: cost of one box (sum of all costs), margin (price − cost), our share (margin ÷ 2), total earnings (share × boxes sold).

For exampleCosts 6 + 4 + 5 = €15. Price €25: margin €10. Half: €5. 100 boxes: €500.

Using the numbers on the card, how much do we earn?

Why it matters. Before signing, you do the maths together, with the same numbers: costs, margin and how it's split. That way nobody gets surprises at the end of the project.

4

What do we put in the agreement?

Before you answer

There can be more than one right answer. Keep the items that make clear who does what, how payment works, how long it lasts and how trademarks and materials are used. Discard the ones that break the GDPR, leave everything verbal or tie the companies together forever.

For example"Each company uses only its own customers' data" protects both; "We can use your contacts however we like" doesn't.

Before starting, everything is put in writing. Choose what to write, and only that.

What do we put in the agreement?

Why it matters. A clear written agreement (tasks, money, duration, trademarks, data) avoids misunderstandings. For a real agreement always ask a lawyer: here you only learn what mustn't be missing.

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Your Partnerships exercise

Luca has written to you: Shall we do something with another company?. You'll solve it in 4 parts, in about 20 minutes.