29% of businesses believe that inadequate vision can result to the failure of a project (source: workamajig). This is the reason why it is important for you to have…continue reading
What Is a Business Partnership Proposal?
A business partnership proposal is a document that presents the feasibility of a joint venture between a proponent and a prospective partner. It conveys the objectives and benefits of the collaboration to convince the partner firm of its potential. The proposal also clarifies all current and future obligations that each party will have once they have established the partnership. Businesses that aim to grow their brand and expand their reach to different consumer bases can find much value in this arrangement for their future endeavors. Like any other business documents, partnership proposals must be written professionally and strategically enough to make an impact.
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The Advantages of Business Partnerships
Your level of experience in running a business isn’t always enough to keep the company afloat. There are some things you can accomplish in a partnership that you won’t be able to do alone. Since entering a business partnership is a big leap to take for any sole proprietor, it’s important to weigh your decision more carefully as you propose your ideas to a potential partner.
How to Create a Business Partnership Proposal
Over three decades, the number of tax returns among business partnerships increased from 1.3 million to 3.2 million. While you could simply say that businesses are paying their taxes as they should, it also implies a rise in the number of businesses run by partners.
Every partnership begins with one proposing to do business with the other. Considering the risks that come with working as a team, you have to understand that not everyone would be too keen about investing in a partnership unless you can manage to convince them otherwise. Listed below is a step-by-step guide to help you write a business partnership proposal that tackles all the necessary points of a successful plan.
Step 1: Do Your Research
You might have a few companies of interest in mind. It might be that these companies have the means to offer your business better market exposure and visibility that you couldn’t otherwise afford. Whatever your reason may be, it’s essential to be knowledgeable about what you’re getting yourself into. You can learn more about the company by looking into its history, employees, and industry performance over the years. The more you know about the business, the more insights you obtain regarding its potential to stand above the competition. This also sends a good sign to the partnering firm, as it shows how serious you are about the deal.
Step 2: Explain How Your Values Align
Even if two businesses are capable of individual success, it doesn’t necessarily mean that they’re compatible as partners. It’s crucial that your values and cultures as companies align with one another to keep both parties on the same page. It’s an opportunity for you to prove how you may leverage complementary skills and technologies for the success of a future partnership plan. That’s because working at odds can be bad for a joint business that’s meant to thrive on a shared goal. This will only cause problems down the road and lead your business to a chaotic end. The last thing you’d want to do is to waste your time and money on a bitter court battle with a former business partner.
Step 3: Focus on the Value Proposition
Partnership proposals are different from sales letters, but like the latter, they do help highlight your company’s capabilities and achievements clearly and concisely. It showcases what the proponent can contribute to the partnership that no other business can. In every working relationship, expectations are set by both parties to ensure that those involved are able to benefit from the arrangement. It’s a critical matter that concerns any wise investor. Think of it as an incentive that will drive your audience to act favorably to your call-to-action.
Step 4: Discuss How the Partnership Will Conclude
Partnership proposals provide reassurance for firms that fear the worst for the joint venture. It’s only natural for every business partnership to want to work it out for the long term, or at least draw itself to an amicable end. Working relationships like these often come to a close due to various internal or external factors. This includes interpersonal issues that are impossible to resolve, along with market changes that lead to significantly low ROIs. Thus, the proposal must outline how the partnership will dissolve under certain circumstances in order to protect the rights and resources of all parties.
The Dos and Don’ts of a Business Partnership Proposal
Reports show that more than 50% of business partnerships fail to succeed due to several debatable reasons. While it’s difficult to determine what exactly these factors are and how much they influence a working relationship, it’s safe to say that the dangers and risks of a business partnership are something that one must consider upon entering the arrangement. So to make sure you kick it off on the right foot, here are a few reminders to take into account when proposing a business partnership with a prospective partner.
1. Do write for your audience.
Potential partners are always going to be skeptical about the idea of collaborating with other businesses. While it may be an excellent opportunity for your brand to branch out to new markets, what’s in it for your partner? Partnerships are meant to be a two-way street in which both parties may benefit from. If you want to convince someone to invest in something promising, show what you can bring to the table. You need to make this clear from the get-go. It can be initiated during a verbal discussion and then elaborated in a written proposal.
You’ll also want to make sure that what you are proposing offers a direct solution to their problems. What works for one client may not work for another, so do some research before making a move.
2. Do attempt to go 50/50.
Emphasis on the word “attempt.”
Many people will warn you about the consequences of going equal. It’s a tough decision to make, given how you’re putting a lot at stake when you finally enter the partnership contract. A 50/50 partnership would make each party more liable for their actions, giving you and your business partner a voice in every major decision. While this arrangement may not be suitable for all circumstances, it won’t hurt to consider it and decide if it’s worth investing. The success of your company should also come as a priority, so if both parties are equally committed to this goal, embarking on a 50/50 partnership could be your best option.
3. Do prioritize your business goals.
Just because you’re writing to impress your audience doesn’t mean you can ignore the goals of your business. If anything, the whole purpose of the brand partnership is to help your business expand to other markets. Even new investors know how important it is to look at the bigger picture when deciding who to partner with and what venture to embark on. The primary objective of the proposal is to give potential partners a reason to do business with you that they wouldn’t otherwise achieve on their own. This also means looking for a company that complements your goals and culture in order to develop a harmonious relationship fit for the long run.
4. Do keep your lines open.
Don’t make it difficult for prospects to become your partner. You should make it easy for them to communicate with you regarding a possible partnership or any other matters in the arrangement that is worth negotiating. Thus, be sure to keep your contacts active. Start by answering questions when you need to, addressing inquiries that are relevant to the partnership, and setting meetings for a more thorough discussion. The whole process will certainly consume much of your time, but it’s something worth investing in if it has the potential of leading your business ideas to better opportunities.
5. Do be keen on details.
Every detail counts in a business proposal. You’re about to make a pitch on a matter you’ve been contemplating on for a couple of months, so it only makes sense to be meticulous about it. This pertains to everything from the central message of the proposal down to the kind of paper you use to present your ideas. After writing, let it sit while you clear your mind. Come back to it when you’re ready, and you may discover a few errors that were overlooked the first time around. A little tweaking here and there may also be necessary to improve your delivery. Once you’re satisfied with what you wrote, you can send it over to a potential partner for review.
1. Don’t partner with someone you don’t know.
We all know how frustrating it is to partner with a random person for a lab report. Now, imagine having to partner with the same type of person for a business venture.
It’s never a good idea to partner with someone you barely know or have never worked with. Family members and friends should be off-limits if necessary. Keep in mind that mixing business with your personal relationships can often lead to emotional arguments that are impossible to fix. It also makes it difficult for you to make rational decisions in fear that your partner might take things personally. Unless you’ve already worked with the person on a past project, only then should you consider a potential partnership. A healthy working relationship comes from your ability to form a solid foundation that both parties may develop together.
2. Don’t be too ambitious.
Proposing to do business with another company can be a terrifying experience, especially when it’s with a business that’s bigger than yours. Any level of pressure or intimidation that you feel may take a toll on your writing. Some proponents make the mistake of exaggerating what they’re capable of in an attempt to impress the panel. You have to be reasonable about what you choose to say in the proposal. There’s a fine line between aiming high and claiming the impossible. Thus, you have to take your company’s resources into account before partnering with a business that is bound to expect more from you.
3. Don’t make it wordy.
Quality over quantity—always. Your readers won’t have the time to skim through a lengthy proposal. As soon as the document lands on their table, they’ll only want to take what’s necessary from it before deciding what to do. A smart approach to this case is to create a short but informative summary of what you want to propose. Think about what your audience would want to read and get from your proposal. Having the main takeaway visible is always a smart idea, as it gives your readers a substantial amount of information to ponder on.
4. Don’t produce a vague output.
There are no rules against using a proposal template to communicate your pitch. You might even find it useful if you haven’t had much experience in proposal writing. But remember to never settle with a generic proposal. It’s not enough to simply convey your thoughts and ideas to a potential partner, as you need to learn how to target your audience directly by telling them what they want to hear. While you don’t want to give away too much information, the proposal should be specific and compelling enough to give someone a reason to trust you and your business plans.
5. Don’t expect to get it right the first time around.
While rejections are an unfortunate part of the game, it’s often inevitable. Not every good idea will resonate well with your audience, regardless of how hard you try to let them see things from your perspective. Instead, consider it as a learning experience that points out what you’ve been doing wrong during your previous attempts to establish a partnership. If it doesn’t work out the first time, you can propose a new, more promising plan in the future. Be sure to consult with an expert to find out what you can do to refine your proposal and leave a positive impression on a potential partner.
The success of a business partnership lies in the proponent’s ability to establish reasonable terms, ideas, and expectations to ensure that both parties receive equal or immediate benefits. While persuading a reader to consider your proposal may not be the easiest thing to do, it’s definitely a risk worth taking.