It is GREAT to see so much collaboration happening around social media - after all, we know that community over competition is the way to go and make sure we ALL succeed. But often times we JUMP into a collaboration or partnership without really thinking about the impact it could have on our business, income, or liability.
So what does it mean to be in a partnership?
You don’t necessarily have to form a “formal partnership” in the traditional sense to be considered partners or collaborators. Basically any time you decide to work with someone else, whether it be 1 month or 1 year, and there is MONEY involved, you should recognize that you are entering a relationship that needs to be captured in writing through a partnership agreement.
Here are the types of collaborations that require a written partnership agreement:
Co-hosting a live event or retreat
Running a group program, online course, or membership site
Joint coaching programs
Selling any product jointly through webinars, teleseminars, etc.
Running a podcast together
Here are the types of collaboration that usually do not require an agreement:
Co-hosting a webinar for exposure and promoting your own products (or being a guest for someone)
Participating in a teleseminar (although still good to have terms for this type of relationship so it is clear who owns what copyright, has access to emails, etc.)
Participating as a ‘bonus’ in someone’s program (as long as it’s clear what you are giving and getting)
Also keep in mind that for any of the things above (live event, course, etc) you ALSO need a Terms of Purchase in place to protect you both from liability and make sure you have your refund policies, etc. for when those customers come rolling in!
Partnerships can be awesome to grow your business but to protect your business and your income, you need to sort out some important terms before getting started.
Just like you should have your client agreement in place BEFORE your first paying client, you should have your partnership agreement in BEFORE you and your partner start making sales.
I know how it goes. You just had the best skype with Susie and are so excited about your potential collaboration! You have such complementary skills, you’re a business coach and she’s a health/life coach and you guys are going to plan amazing retreats together in Aruba. Sun! Sand! Cocktails! Plus a group of fabulous like-minded entrepreneurs. Or maybe in another fabulous location - Miami, NYC, San Fran, Paris!
You already know these tickets will sell like crazy because who wouldn’t want to come grow their biz and get through some health/life blocks? In fact, you decide to split the tickets 50%-50% after expenses and get a sales page up ASAP. You begin to see such potential and momentum here and you are loving it.
The program sells out in a week. You make plans for more events and growth in the next 6 months.
But then...Susie changes her mind about how she’s going to do her coaching sessions. She decides that she wants to do X, when you had both agreed to do Y. She stops being as responsive to email. All the money is in her PayPal account. Doh.
You recognize you need to get something in writing ASAP. Once you bring this up she shuts down even more (RED flag!) Now she doesn’t want to do the other events you’ve already started planning. All of a sudden you have a group of ladies coming to Aruba and the program is now totally different, plus some of Susie’s people now want to back out.
You realize that you and Susie never talked about your refund policy or what would happen if one of you wanted to back out. And now you’ve started marketing under this awesome name you guys came up with and you own the domain, but what can you do with it?
The list of what could wrong even in the beginning stages of a partnership is endless! But you and Susie could have avoided all of this by having a partnership agreement set up BEFORE you started taking any money.
There are lots of things to keep in mind here and if you want to protect your income, your biz, and your new partnership - get that agreement in place STAT.
So what types of stuff goes into a partnership agreement?
Here are just a few of the things you need to keep in mind!
Terms of the partnership - who is responsible for what? Get specific here - if you are in charge of setting up the landing page and Susie is responsible for automating in mailchimp you need to say it! If you are reserving the hotel and Susie is ordering catering, include it!
Payment - what is the breakdown? When is it determined (after WHAT expenses have been taken out?) Where is the money held? How is it paid out? Who pays for expenses along the way?
Termination - how long does this relationship last? One event? One year? Through one group program? What happens if someone wants out? What happens if something awful happens and someone gets sick or worse??
Intellectual Property - who owns the name of your course? What about the logo? What about the video YOU made and the PDF SHE made?
Liability/Claims - you need to make an agreement that you won’t sue each other and if something goes wrong, you agree to a different type of dispute resolution (MUCH better than court…)
It can be way fun to plan something with another entrepreneur but you need to make sure to have an agreement between the 2 of you before you get too far down the path. Whether you’re hosting a live event/mastermind, selling a group program together, or putting together some kind of product, you NEED a partnership agreement in place FIRST.
Do you need one? Let's chat!