Every company builds a collection of key partners. Think of a partner as another person or business that helps your business be successful. Key resources and key activities may be provided by these partners. You will want to nurture relationships with your partners and be prepared in the event that something happens to your partners.
Reasons for partnerships
Optimize and Scale
Partners provide their expertise so that your company can focus on what it does best and use them to optimize and scale what they do best. Only completely self-sufficient companies don’t need partners.
Your company may have another business providing services, such as a bank, bookkeeper, insurance provider, a product you need, or even shipping since they invest in being the experts and can keep up with changes in their industry. You can optimize the service you provide to your customers based on who you choose as a partner.
As your company grows, shrinks, or makes strategic shifts, you can work with partners who can help meet the needs of your business. Partners can help scale by providing more inventory, production capacity, or distribution.
Reduce Risk and Uncertainty
The most risky areas of a business are related to money, knowledge, and resources. Partners can help reduce the risk that a lack of these three things can cause.
Working initially with a partner allows for learning about a business area that you don’t know. Once you have knowledge, you may decide to invest more in an area and keep the partner as backup. You may also learn the partner is far better in handling that part of your business and expend your limited company resources somewhere else.
A partner can allow your company to experiment with a market for growth or change of direction without your company needing to invest money and resources.
Multiple partners that provide similar products, services, or materials can help reduce the uncertainty of something not being available.
Acquire Resources and Activities
Your partner may offer resources such as financing through bank loans, provide access to their customer base, provide rare materials for the production of your product, or produce your product based on your design.
Accounting, marketing, IT infrastructure, production, and other key activities might be provided by partners. Again, leveraging partner investment and knowledge in activities that they are experts in, allows your business to focus on the activities that make it unique.
Build Brand Awareness
Making your brand visible to potential customers is critical. Co-marketing, distribution, and co-sales with a partner can spread your reach into new markets and new regions. A well-established partner can help build trust in your brand with customers that are not familiar with your company.
Expand Product and Service Offerings
Customers are attracted by more. Better customization, wider selection, and more services help entice customers to work with your company. Partners can provide compatible products, services, support, sales, or training.
Above is an example of a typical store. The store may rely on a bank loan to operate which makes the bank a key partner and loan a key resource. Merchandise in the store may be bought from a supplier who provides a line of credit. The supplier may be a key partner, but they may not be the sole provider of merchandise. A shipper may be a key partner because the store depends on online customers. Shipping of product maybe a key activity because customers expect Amazon like service.
Define Your Key Partners
As you fill in the Key Partners section of the BMC, consider these questions:
Who are our key partners?
Who are our key suppliers?
What key resources do they provide?
What key activities do they perform?
What might we give them in return?