Strategic Partnerships: Each Business Getting Something Out of the Deal
No business works entirely in a bubble. You rely on a wide range of other businesses to help with daily operations such as suppliers, distributors, retailers, marketers and financial experts. Strategic partnerships are unique agreements where you team up with another business to the benefit of both parties.
While you still maintain your separate business identities and objectives, you provide the other business with something that they lack as they do the same for your company. What can be provided may vary as the other company may offer an increase to your branding presence, bring in more customers, enhance your credibility, find ways to cut costs to save more money, or other factors.
Ways to Simplify Your Strategic Partnerships
Forming a strategic partnership is only a small step in the process. Making that partnership strong and stable requires a host of resources and planning to make it work out for the best. Here are a few tips on how to simplify the partnership so you gain the most out of it without placing your company into someone else’s control:
Decide on what aspect you want improved in your operations and what you can offer to others.
It’s easy to get caught up in wanting instant business growth by all means possible. Yet if you are doing too much at one time without knowing what aspect of the company that you want the partnership to improve upon, then you won’t be able to monitor the partnership effectively or measure what advantages you are obtaining.
First, decide on what one detail you are seeking to gain from another company. Are you looking for a marketing partnership, technology partnership, supplier partnership or financial partnership? Once you have decided, and then figure out what it is you have to offer to other companies. This tactic will allow you to form the right partnership that fulfills the needs each party has.
Fully understand the risks before committing yourself to the strategic partnership.
There are always risks when running a business. When you form a strategic partnership, you have to be aware of not only the risks your own operations have to deal with, but those risks that may come from the other company. Decide if the risks that may appear are ones you want to deal with, and how they will affect your own operations in the long run. Prepare the appropriate risk management measures to minimize the issues that may appear to protect your operations and sales.
Have clear terms outlined in the agreement and deliver what is promised.
Often when you are in a strategic partnership with a larger company, you will give them more power and sway to the point where they become the main decision makers because they are bringing their experience to the table. Yet when you hand them reins of your operations because it feels like they have your best interests in mind, you may be giving over such a large amount of control that can sometimes lead to disaster. You are in a bad position and have no clear way to get the operations back to your own objectives.
Before you step into any strategic partnership, have an agreement outlined with the terms that are acceptable for both parties. Stick with this agreement without deviation and deliver what you promised while the larger company does the same. Don’t let the other company demand more than what is offered without discussing and updating the agreement so you always maintain control of your business.