A collaborative effort can be a good way to expand your small business. Working with another business, individual or even competitor can help in a number of ways. A larger customer base, shared marketing efforts and dispersing of costs can create a project that can benefit both the collaborating entities.
Grand Rapids brewing company Brewery Viviant is teaming up with New Belgium Brewing Co. of Fort Collins, Colorado to create a new collaborative beer. The new brew called “Escoffier” will be available in September. The deal will combine the two breweries ingredients and each will distribute the beer in their own networks.
Such a collaboration is beneficial to both sides. Brewery Viviant will gain exposure to New Belgium’s 3rd largest craft brewing market. New Belgium who recently made moves to break into the Michigan market will gain a foothold by working with an established local brewer. The benefits go beyond this but as can be seen there is a reason for such an effort.
With these collaborations there also needs to be some serious planning on the legal side of things. These deals are ones that at the beginning both sides can so excited to move forward they forget to fully plan. In our beer example, how are the profits split? What is to happen if this brew goes “viral” and is wildly popular? Who gets the money? A collaboration, no matter how big or small, should have well planned out documents. These agreements need to lay out how the collaboration is going to work, how the parties are going to conduct themselves after the collaboration and everything in between. The results of a failure to lay out this plan or to use a plan with holes in it can easily become a lengthy litigation process where all benefits of the collaboration are lost.
Source: “Brewery Vivant collaborating with nation's third largest craft brewery on 'Escoffier'” by Garret Ellison of MLive.com