Buddy System

Lessons Learned

What can we learn about vertical selling from these successful entrepreneurs? All the parties looked inward to accomplish their main goal--providing a quality product. Imitate their good example by looking within and asking yourself two key questions:

1. Is your reputation with past customers solid? Too often, entrepreneurs concentrate more on networking and getting "in" with the right people than on being one of the right people. A graduate professor of mine one told me that if you throw a good script out on the Hollywood freeway, someone is bound to find it. Many people would call that fairy-tale thinking, but Gilbert wasn't a fairy godfather--just a man who discovered two talented people and wanted to bring them together.

No big sales pitch should be necessary when professionals connect to do business. The size of the market each company dominates is not as important as the standards the company imposes on itself to service that market.

2. What do you expect to get out of this relationship? I interviewed Dembergh and Thuerbach separately, so neither of them knew what the other would say about their relationship. The outcome? They both share the same values in life.

"Both Alpine Homes and Dembergh Construction are independent businesses," Dembergh says. "We do not receive any type of monetary reward from each other. The payoffs received are the mutual benefits of customer satisfaction."

Thuerbach agrees: "Anyone who thinks they need referral fees [to partner with another entrepreneur] is missing the point. When the relationship becomes an economic one, there is time wasted on book keeping and negative energy between people who are trying to figure out who owes what. This time could be better spent going out and doing more quality work."

Obviously, not all entrepreneurs share this "no referral fee" policy. If you want both mutual satisfaction and remuneration, the time to talk about the details is before any business transactions take place between you.

Partnering is a close alliance, requiring a lot of maturity on both parts. Sometimes, that boils down to being able to discuss why either party wants to do business together in the first place. And that issue alone could really be what's hot, hot, hot.

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This article was originally published in the December 1996 print edition of Entrepreneur with the headline: Buddy System.

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