A friend of mine, Jane, owns a service firm that really takes care of its clients. She was starting to feel the strain of high labor-related costs and overdependence on a few key people, so she invested in “productizing.” You know what I mean. She protected her intellectual property (IP), turned their process into a system, and obtained outside assistance from a merchandising company to package it all. Maybe you can imagine how she felt. Jane had invested a great deal of time and money and was now feeling rather low on money, energy and time.
I found myself speaking up because it seemed like Jane was giving in to more and more demands from prospective licensees and strategic alliance partners. We have noticed that the same thing often happens to owners of companies who are negotiating with their first franchisees or joint venture partners.
It pays to do a little research about the offers being made by comparable companies. When you review materials distributed at franchise expo exhibits you quickly see the value assigned to IP, great product, systems, procedures, marketing, expertise, and reputation. It is reasonable to expect licensees, strategic alliance and joint venture partners, or franchisees to be entrepreneurial enough to do their part and share the risk.
I couldn’t help but wonder if the people Jane’s been negotiating with are trying to take advantage of the fact that she wishes that she had more cash, time, and energy. Folks who take advantage and would demand more and more and more during initial negotiations probably won’t be win/win partners later.
When Jane got a good night’s sleep and took another look at her value proposition, she moved beyond being embarrassed that she is temporarily low on cash, time, and energy. A FAIR deal wouldn’t involve her putting up more money anyway!
Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions. Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieving accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search. 2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.