How to build a business plan for a successful partnership

[fa icon="calendar"] 28-Jan-2020 08:23:00 / by Zbigniew Smierzchala

Zbigniew Smierzchala

How to build a business plan as a foundation for a successful partnership -  a quick guide for software vendors

How to build businessplan shaking hands partnership

 A strong business plan is key for a successful partnership between independent software vendors (further: ISVs) and their partners: re-sellers and service partners such as Value-Added Resellers (VARs), Technology-, OEM Partners, or other ISVs that build solutions on top of, or integrate with the vendor’s platform.  The time spent on developing the joint business plan is a great investment which lays the foundation for a lasting and successful relationship. The business plan helps to clarify if the collaboration creates the necessary win-win-win situation for customers, for the vendor and for the partner based on a unique and differentiated value proposition generated by the cooperation..

The plan must also include a go-to-market plan, describing the strategy and tactics to achieve the agreed objectives. Further, it clarifies how the joint offering would be delivered to customers and maintained throughout the partnership. Finally, it should include control KPIs (Key Performance Parameters) to measure the progress of the collaboration. Additionally, it helps the software vendors and resellers to avoid channel conflicts, as the Business Plan helps resellers to define a clear and differentiated value proposition as well as the position in a defined market segment – based on industry expertise, assigned territory, specific technical skills, etc. A solid business plan should include as a minimum the following sections:

Module1: Executive Summary - WHY the partnership makes sense

The goal is to briefly tell your readers (senior management but also anybody who can provide support to achieve the joint objectives) what the relationship aims to achieve and why it will be successful. The executive summary contains all the essential information about the objectives of the collaboration, key milestones, and metrics. The executive summary will be the first chapter of the business plan, but it’s actually the last section that you should write.

Module 2: Joint objectives and value proposition - WHAT the partners want to achieve by combining their resources

In this chapter, you can outline what the objectives of each partner are and why the partners join forces to achieve a goal that couldn’t be achieved by one partner alone - for example, due to resource constraints. This module also describes which products, services, and resources each partner will contribute and how these assets will be combined to create a compelling value proposition to customers.

In the software industry, vendors usually provide software products and technical training while resellers contribute specific industry know-how and customer relationship or specific project management and solutions implementation skills and resources.

Also, it’s advisable to include the information on how revenue will be generated for partners – for example, the ISV generates the revenue through license fees and the VAR through services with usually just limited contribution from the reseller margin.

The key is to identify and define which customer business problems will be solved and also what the Compelling Reason to Buy is for customers.

Module 3: Joint Marketing and Go-To-Market-Plan outlining HOW partners want to achieve the objectives

In this part of the business plan, partners should outline how they want to deliver their value proposition to customers, utilizing their resources to achieve joint objectives such as revenue and profitability expectations. What are the target markets and customer segments and which route to market (direct – indirect sales) exist? Also, how the sales and implementation cycle will look like needs to be defined.
The section can cover responsibilities related to:
  • How to order and use demo licenses (NFR /Not For Sale)
  • How to assess customers’ needs
  • Architecting and configuring the solution
  • Quoting and configuring the solution
  • Post-sales support – SLAs
  • User and admin training

Partners often decide to build a Market Development Fund (MDF) to finance joint marketing activities such as events. Further, the software vendor may also sponsor dedicated headcounts, who are fully committed to deliver the joint value proposition and work as “embedded” resources within the partner’s organization.

Module 4: Control - HOW to measure and control the progress

Now when it’s clear why the partnership exists and what the partners want to achieve, it's time to outline how the relationship and the progress will be measured and how problems occurring during the partnership will be solved (escalation path).

It’s recommended to schedule regular Partnership Review meetings: the structure may consist of monthly, quarterly and yearly reviews.

The objective of Monthly Reviews is to review the tactical revenue generation activities and sales forecast as well as discussing any ongoing issues and future project planning.

Quarterly Business Review (QBR) meetings are rather operational and focused on reviewing the agreed key performance indicators (KPIs). If the performance is not as expected, eventual corrective actions, such as assigning additional sales or pre-sales resources or more lead generation activities can be agreed upon. The typical KPIs are (but not limited to):

  • Revenue and pipeline development
  • number (further: #) of joint lead generation activities per time period
  • # of salespeople trained
  • # of technical persons trained,
  • # of joint customer visits,
  • # of published case studies,
  • # of joint account planning sessions.

The Annual Review is a strategic, high-level review of the achievement of the previous period and provides strategic guidance for the next year. Does the partnership deliver results as expected? What worked and what didn’t work as planned? What can be the eventual root causes for the things that didn’t work? How can the root causes be addressed? The above can be delivered as a SWOT analysis – a summarized view of the current position, specific strengths, weaknesses, opportunities, and threats. Finally, the annual business review outlines the vision and objectives for the next year which serve as a foundation to develop an action plan and assign required resources. The agenda may include topics as follows:

  1. WHAT has been achieved: Progress on agreed KPIs such as revenue and pipeline development, Key Accomplishments and Challenges
  2. SWOT analysis, what worked,  what didn't work and WHY  (root cause analysis) - to provide strategic decision alternatives for decision-makers
  3. Validation of the proposed alternatives by senior management resulting in a strategic direction for next year, as a foundation for more detailed planning / action plan 
This is just high-level guidance, however. Answering the key questions about WHAT the partners want to achieve, HOW they want to achieve the goals and HOW to control the progress enables all stakeholders to have a clear understanding about WHY the partnership makes sense at all and sets the foundation for a lasting and successful collaboration.


Opinions or points of view expressed in this article represent the personal position of the author. This document does not constitute professional advice. The information in this document has been obtained or derived from sources believed by the author to be reliable but I don’t represent that this information is accurate or complete. Any opinions or estimates contained in this document represent a judgment at this time and are subject to change without notice.

Digital Doorway
Digital Doorway is pleased to share industry insights and best practices from industry experts, and we would like to thank Zbigniew for authoring this article. We invite you to share your own experience and welcome comments on this topic. Please watch for our next article in our Go-To-Market series.  
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Topics: Customer Journey, Technology Selling, Strategy, Sales Software, Partnership, solution selling

Zbigniew Smierzchala

Written by Zbigniew Smierzchala

Zbigniew Smierzchala is a seasoned Go-to-Market expert and digital transformation strategist. He has 25 years’ experience in international business development, channel management, enterprise sales and corporate strategy. Before joining Hewlett-Packard, he worked for Kodak Eastman Software, EASY Software and Xerox.

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