How many of you think you don’t have enough business? Guess what, there are others among you that have said they have too much business! These two predicaments are an excellent starting point to show the power of strategic partnering.
A strategic partnership is a formal agreement between entities to share or exchange resources. Notice I said formal. This means a written document with expectations spelled out for both parties. Let’s see how we can apply this concept to our original problem.
Our first business complained they did not have enough business. If they completed a capacity analysis (see our article titled “Can You Achieve Your Goals This Year?
” ) and found out they have a problem with sales and/or marketing, then they would be correct. So, that means they have excess capacity.
The second company has too much business. Some may ask how is that a bad thing? Actually, this is worse than the first scenario. If you cannot deliver what you promise, you lose your reputation! This is the most important asset in your business. Without your reputation you have nothing.
The problem our second company is suffering from — less than needed capacity. Do you see a synergy between these two companies? This is an excellent place for strategic partnership. The company with too much work gets extra capacity to deliver their service or product. While the first company gets the work they currently lack to keep their cash flowing.
There are pitfalls to strategic partnerships too. This is why I strongly recommend documenting your agreement in writing before you commence. Often, people become complacent in strategic partnerships. They expect business to come their way because of the agreement. You cannot run your business that way. Do not expect business from a strategic partnership unless both parties agree that is how the relationship will work.
Another major pitfall of strategic partnerships is when one party takes advantage of the other by exploiting inequities in the arrangement. When someone is shorted in a relationship, problems are not far behind. Just approach the strategic partnership as you would approach a relationship with your customers. Be honest and ethical, and there should be few if any problems.
Strategic partnering is a powerful tool to get the resources you need without a large investment of capital upfront. With the right relationships strategic partnerships can make your business even stronger, because it brings new views and idea to your business from a different group of perspectives. Done right, with mutually beneficial objectives and a written agreement of how the relationship will work, there is little if any downside to strategic partnering. So, take these ideas here and look for ways that you can use strategic partnering as a way to expand and grow your business.
Share your experience with using strategic partners as a growth strategy.
Note: Stay posted to DE, Inc. for our next Business Accelerator Training program – “Maximize Profits Using Strategic Alliances”
Copyright ©2011 Dino Eliadis