Business Models 101: Key Partners

 In this part we will discuss the Key Partners related to your business. The people, companies that you rely on to support you (of course usually by paying them).

I have to repeat it on every page but starting something on your own, creating value for you, your family and the world is a totally recommendable thing to do. You want to create your company. This is GREAT. The world has been made by people like you. Entrepreneurs. Self-Made Men, Creators, Builders people that believed an obstacle is just another great challenge to overcome, to solve and put behind them as an achievement. 

The Key Partners

When you have an idea and start developing it, everything seems pretty achievable by yourself during the first 5 minutes of thinking.

But once you start to look at it seriously and stat listing everything you will need to make out of it a success story, you will see that you might need some external help. This external help can be for material things or for services.
Material things can be consumables, buildings, machine, furniture, computers, material to build your products, etc...
Services can for example accounting support, servers for your website, delivery service, building, programming, secretarial help, etc...If these services and material things you need are contributing heavily to your business you should set them as key partners or if they cost you only once a year a small amount only, then you should put them in the cost structure part of your business model.

Lets say your passion is accounting (ah ah ah who is passionate about accounting but let's assume so...) then you might want to associate with other accounting companies that might not be competitors but could be partners because they provide services that are complementary to yours (that's called synergy if you 1 + 1 is more than 2). In that case the accounting companies are key partners.

If your passion would be making a cupcake factory, then you might not be so in love with accounting but you will need an accountant to make your tax return properly. In that case he is part of the cost structure. But if his cost are only negligible in your cost structure, then he might not be a key partner but just a yearly cost. If you start making a lot of home and local made pancakes, then one of your key partners might become the local flour producer which will provide you with this main ingredient.

key partners

Here are the questions you have to ask yourself about the Key Partners:

Who are the key buyers? Could they become a partner is a question ask yourself and if positive, then ask them too.
Who are the key suppliers?
Which key resource is dependent of key partners or suppliers?
The purpose is always the increase of productivity of your company, the reduction of risk, dependence and the acquisition of resources to the best possible price.

Here a list of possible Key Partners:

  • Your suppliers (if the volume you buy to them are big enough, you could envisage a partnership for the long term)
  • Another company like your could become a partner if you are not delivering to the same customers.
  • Another company could join together to buy in bigger quantities at some common suppliers.
  • Your customers (if you deliver to companies, some could become partners)

 

Previous: Key Resources

Next: the Cost Structure

 

Download the template from here.

 

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