The adage that two brains are better than one may explain why a lot of businesses create partnerships. There is plenty of evidence that meaningful partnerships and alliances are good for business.
Whilst big business has always known this (e.g., McDonald's with Coca-Cola and Walt Disney; Nike shoes and iPhone), partnerships can bring significant benefits for small firms too.
Knowing how to join forces with another business can be a key factor in making any growing company successful. Here are some of the factors to consider when searching for a strategic partner and building a successful business partnership:
- Set some clear objectives around what your company wants from a potential relationship. The vision for a proposed partnership needs to be crystal clear.
- Consider what benefits you can provide to help your potential partner's objectives. To discover this, it's worth considering the business assets. What assets are in your business, both fixed assets and intellectual property assets, that you will be able to leverage to achieve success from a business partnership?
- There needs to be a 'win-win' intention, with something in it for both parties. All target markets need to align, plus there needs to be value alignment. Draft an overview of your offering, your target market, draw the connection between your business and the prospective partner's business. Outline how you envisage reciprocal activities that lead to mutually beneficial business opportunity.
- Take the time to find the right partner 'fit'. When considering a business partner ask questions such as:
- What other offerings are your clients buying before or after they buy from you?
- Knowing your industry, which businesses would you approach if you had an additional product or service need from a business offering these adjacent products or services - and why?
- How do your existing clients hear about you now - do any come from other business referrals?
- What would a potential business partner find appealing about your business assets (both fixed assets and IP)?
- When you list prospective alliance business partners, consider how you might go about meeting them. Research social media, mutual connections, maybe contact an industry association and request introductions.
- Both parties need to cultivate trust and fully appreciate the critical success factor for an effective partnership.
When you find common ground, it's essential to seal the arrangement. Undertake a written agreement only after all issues have been fully canvassed. Usually, an appropriate business partnership takes time to establish. Quite often activity measurement needs to be agreed upon and monitored to get success.
The business partnership will need to be continually managed on an ongoing basis. It can't be established and left to a project team to operate without continual involvement from the senior management.
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