While writing for and reading over some of my favorite blogs today, I noted several discussions on strategic planning, a specialty of mine. Though most all the articles were excellent and developing good comments, I noted that no where among them was there any mention made of the potential for "partnering". I wondered if many businesses ever even consider partnering with another business as a possible strategy to grow their companies? Like any strategy for your company or operations, this requires careful consideration. You should consider however that there are many expamples of successes brought about by partnering. Most common is in the construction industry where it is common to do joint ventures to develop larger projects, where one company cannot do it alone. A study (noted below) of government contract bids and the bidders, showed that contractors who teamed with others to get those bids were 54% more successful. Admittedly there needs to be an obvious and natural fit for you to partner with another company, both sides need to benefit and that outcome should appear obvious at the outset, but when there is benefit, there is also a good potential for you too. Consider as well that such a partnership may get both of you not only more business in your field, but may develop new potentials for added income streams for both of you as well.
The following article written by Emma Johnson was recently posted on Success magazine's website. I believe it very nicely outlines the critical steps to creating successful business partnerships.
American Express surveyed small businesses in government contracting and found that those who teamed up won 54 percent more prime contracts than average.The key however is to create partnerships that don't go wrong and lead to frustration, financial losses and even litigation.
David Gage, co-founder of business mediation firm BMC Associates, and author of The Partnership Charter: How To Start Out Right With Your New Business Partnership (or Fix The One You're In) writes, “People like to quote Don Corleone from The Godfather, when he says, ‘It’s business, not personal. But everything with a partnership is both personal and business. It’s important to pay attention to the business matters at hand along with their legal aspects and personalities," he adds.
Consider these steps before creating a strategic alliance with a partner:
• Assess all aspects of your business and identify areas of growth potential.
• Figure out what you do best—and where you need help. Partners should complement each other, says Denise Rodriguez-Lopez, an American Express OPEN Advisor, who consults small businesses on partnerships. “The goal is to increase capability—whether through offering new products or services, expanding in capacity or geographically, or cross-promoting,” Rodriguez-Lopez says.
• Make sure the two entities easily fit together to better serve the customer. “There needs to be obvious synergies,” Rodriguez-Lopez says. “It is not illegal for an information technology firm and a janitorial services company to form a partnership, but how many opportunities will that create?”
• Research the potential partner to make sure they have solid finances and a track record as a reliable and ethical business. “Make it explicit that you want to learn everything you can about them in short order,” Gage says.
• Does the organization share your values?
• After doing your homework, go with your gut, Rodriguez-Lopez says.
• Get it in writing.
Strategic partners’ written agreements should cover these points:
• Who does what? Be specific.
• Who will be the client point-of-contact? “Clients need to know who they will be dealing with,” Rodriguez-Lopez says.
• If money will change hands, a system needs to be defined.
• Create policy for the event that a new innovation stems from the partnership. Who will own this intellectual property?
• Establish a trial period for the arrangement with defined check-in dates.
• Create a mediation plan or a strategy to dissolve the partnership in the event the arrangement goes south.
Indeed, partnerships are a proven way to boost the bottom line and the formula for a successful strategic partnership may seem easy: 1 + 1 = 3, if everything is agreed to ahead of time, and your partner is willing to dance the same dance.
So next time you are considering what you can do to make a difference in ytour market, to add to your benefit to customers and thereby differentiate yourself in the market, maybe you should consider whether your business is one that could effectively benefit from a strategic partnership with another company? Good luck and I hope this article is useful for you!