How to Make a Partnership Proposal
Partnerships offer a way for businesses to reap a number of benefits, ranging from access to new markets and expanded customer bases to leveraging complementary skills and technologies. To make an effective partnership proposal, you must address a set of common concerns that includes benefits, values alignment and goals of such a partnership, as well as questions of how to structure any future dissolution of the partnership.
Even if two businesses share a particular market segment or bring complementary offerings to the table, those factors do not make for an automatic partnership fit. Your proposal must show how the businesses’ brand values and business cultures align. For example, if you brand on customer satisfaction through over-delivery, a business that brands on low price makes a poor partnership candidate. The different brand values and the cultures that support them tend to work at odds. A business that brands itself on the quality of its parts or product performance, however, makes a natural match. The values of quality and over-delivery, along with the business cultures that support them, align closely.
Many partnership proposals take on the character of a one-way street, in which business flows from one business to the other. You can expect your potential partner to understand the benefit you stand to gain from the partnership, but make a point to tell them what you expect to get outright, whether that means additional resources, co-branding or just more customers. You must explain the exact benefits they can expect to gain from you in the near term. If you cannot bring an immediate benefit to the table, your potential partner lacks a good incentive to sign on.
You need to outline the goals of the partnership, such as which business handles which tasks and how much money each of you needs to invest. You also need to set out, in broad terms, what kind of return on investment the partnership should generate. The proposal should also include a method for resolving disagreements about how to achieve goals or decisions that involve both businesses.
The hope for any partnership proposal is that the partnership either works out for the long term or, in the case of joint ventures, draws down to a designed and amicable end. In practice, businesses often want to pull out of partnerships ahead of schedule because the partnership fails to deliver a return on investment, interpersonal issues make effective leadership impossible or market changes undermine the viability of the partnership. The proposal should suggest a framework for dissolving the partnership and introduce noncompetition agreements to protect all parties.