During a breakout session on “Choosing Business Models” at the IMC GROW! Conference in Las Vegas, it became apparent that several attendees already utilize or are considering strategic alliances and/or licensing deals. I’m more of an optimist than a pessimist, but I did find myself calling up sad stories and providing warnings.
Licensing can be a wonderful idea for a service firm that has solid content. Other professionals who don’t have great content but love to speak, train, consult, or coach pay a reasonable fee for your permission to utilize your content. You can provide training and install some form of quality assurance program to protect the quality and your company’s reputation.
However, the problem is that most people who pay licensing fees to use someone else’s material are not business-minded or entrepreneurial. Before you know it, licensees are calling you to ask for referrals of clients or assistance with selling.
I like reviewing any licensing proposal through the lens of franchising. You may still choose to only license your content, but looking at geographic considerations, assigning a value to your marketing, reviewing the assumptions behind business management so everyone can make some money, thinking through legal protection for everyone involved, clarifying responsibilities, etc. can strengthen a licensing arrangement. I’ve seen people opt for franchising once they look through that stricter lens.
The same thing happens when a strategic alliance is being proposed. What would prevent the participants from fully committing to a more formal joint venture? Those issues are what destroy so many strategic alliances.
Known as The Growth Strategist®, Aldonna Ambler built and grew a suite of companies to help midsized B2B companies achieve accelerated growth with sustained profitability® A Certified Speaking Professional (CSP), Ambler has addressed over 2000 audiences and hosted a syndicated online talk show about growth strategies for 9 years. As a growth financing intermediary, Ambler raised over $1 Bil dollars for midsized companies. The winner of over 2 dozen prestigious national and statewide "entrepreneur of the year" awards, Ambler is available to speak about “profitable growth during any economy” and/or serve on the board of a growth-oriented privately-held company.