Commercial partnerships are a great way to create new marketing channels and revenue streams
You can use our Commercial Partnership Agreement to get you started, and adapt it to your specific partnership needs.
One big thing reading the business news will tell you, is that you should have more than one or multiple revenue streams for your business to diversify the risk.
It isn’t always obvious where to create those. If you’re selling a product, where do you make money aside from selling the product? If you’re creating an online marketplace, how do you make money aside from commissions on transactions (e.g. like Uber or Airbnb)?
One route is to try and create a commercial revenue stream either through:
- Co-operations with another business
- Sponsorships from another business
STEP 1: Ask yourself, “what does my business have, which another business (which isn’t a direct customer) could benefit from?”
Some examples which you can map out for your own business:
Access to your customers, clients and visitors.
e.g. Phone shop/Phone repair shop. Gym/gym-wear brand. Travel website/hotel brand. They all market and sell to the same people, so why not co-operate with a commercial incentive?
Access to a benefit which I can’t offer but I want to
e.g. Vitality Health Insurance have (or at least had) partnerships with Eurostar, Vue Cinemas and Starbucks. They seem quite remote, but these entertainment and leisure providers give Vitality a new sales and marketing angle. They sweeten the deal for customers.
Access to information and statistics (data protection laws make this more complicated, but it is still an open opportunity, even with restrictions).
STEP 2: Find complimentary but non-competing businesses with similar customer, client and visitor bases.
Think of your customer or client, and consider which other suppliers and providers they use? Could you reach out to their other suppliers and see how you could cooperate to each reach new ones?
Think in ‘categories’ – which categories of businesses could you partner with?
STEP 3: Devise a strategy and make contact
What can a partnership look like?
- “our businesses feature on each other’s sites (potentially with commissions for click-throughs or closed sales).”
- “partner’s business features on your site and products in exchange for a sponsorship fee.”
- “if you use our business, then you get a special offer with our partner, and vice versa.”
- “if you subscribe to our business, then you get a free product from our partner as part of your membership package.”
- “we will each feature the partner in an email marketing campaign, raising awareness about each other to our existing, complimentary, but distinct customer bases.”
- “we run a joint competition where the prize is linked to our partner’s offering.”
There are many, and you can think what works best based on the potential categories of partners you think of and get in touch with. They can be mutual, or they can be one-way in exchange for fees.
But – if asking for money rather than mutual cooperation, remember to hone in on what the sponsor really wants (i.e. the partner is going to be asking ‘what’s in it for me’, and not ‘how can I help someone else’s business grow?’). You will need a clear picture of their rationale.
Once you have a broad strategy, you can do some networking and make some phone calls – cold phone calls are okay too.
STEP 4 – The Contract: Close the Deal
This is where the Legal Sidekick team can help you out (in association with our ‘partners’, Accelerate Law). We’ve worked on lots of commercial partnership and co-operation deals and will be here to help when you need it.
You can get started by creating your Commercial Partnership Agreement here.
This Step-by-Step Guide was written by Legal Sidekick. Legal Sidekick is the legal platform for startups. We offer automated contracts and loads of startup legal resources and guides. For queries on commercial partnerships or generally, contact us directly.