Boost Your Business with Power Partners
By Nina Kaufman, Esq.As I channel-surfed the other night, a VH-1 documentary on disco reminded me of 8-track tapes. When all of my friends had them, I absolutely, positively had to have them, too. But very quickly, I realized that they didn’t meet my needs (I couldn’t rewind and replay my favorite parts of the Star Wars soundtrack), so I was on to the “next new thing” (stereo audio cassettes!).
Fads can be fun when there’s not a lot at stake. But when it’s your business, it helps to look before you leap. And little by little, I’m now hearing about the fallout from “strategic alliances” . . . largely because people rushed into them as the “next new thing” without thinking it through.
Begin with the end in mind
The most important question to ask yourself about alliances is: do I really need one? Many business owners run around trying to “collect” them for the sake of having them, without focusing on whether their own business needs will get met. Or whether the work to create and sustain the alliance will outweigh its benefits. Don’t start by thinking, “I want to form an alliance – with whom can I do it?” Start with, “I have a business goal, and an alliance is a good way to get me there.”
What are your immediate business goals? Maybe the goal is to increase your visibility in a certain market so that you can attract more clients. If so, what kind of clients? More of what you already have? Larger clients? Clients in a different industry? Will these be clients for your current product or service offerings, or do you want to branch out into new areas? The answers to these questions are vital, because they help you hone in on (1) whether you will truly benefit from an alliance at this point, (2) if so, who will be the most appropriate allies for your company, and (3) what will be the best approach in working with them.
Finding the Right “Power Partner”
Let’s say you have decided that you can achieve your goal better, faster, more efficiently with an ally than by yourself. Now it’s time to choose the right “power partners.” “Power partners” are people or companies that can give your business the boost that you’re seeking in the way that you’re seeking it. How do you choose? Again, this ties back into the goals you have set for your business. Among other things, you’ll want to ask yourself:
· Does this person/company offer products or services that complement mine (direct competitors are often not a good power partner choice)?
· Is the person/company attracting the kinds of clients I want to attract?
· What is this person’s/company’s reputation (do your homework on this one – you do not want to get into bed with a bum)?
· Is the person/company in an industry that I want to move into?
· Is the person/company a larger (or smaller) business, and if so, will that make a difference in who controls the relationship?
· How much experience does this person/company have?
· Do I enjoy working with this person/company? What is their “corporate culture” like?
· What are this person’s/company’s goals in collaborating with me/my company? Are they compatible with mine?
If you can answer “yes” to most of these questions, then you’re off to a great start! Many small business owners don’t take time to pre-qualify their power partners . . . which is a significant factor in why so many arrangements fail.
How do you want to work together?
Once you have selected your power partner, now focus on how you will work together. Will this be on an ongoing basis, or for a particular project? Will this be a long term arrangement, or will you want to keep it on a short fuse? Will you be collaborating for marketing purposes only, or will you be jointly pitching and serving clients? Will you work exclusively with your power partner, or will you have similar arrangements with others?
Although people use the term “strategic alliance” to refer to a whole spectrum of collaborative relationships (see our article, “Watch Your Language”), the term is most apt for arrangements where you have committed to a longer time frame and more involved responsibilities (especially if money will be paid, joint clients developed, and intellectual property created).
Just like personal relationships, it’s best not to get too heavily involved before you’ve had a chance to test the waters. Strategic alliances work best when they evolve naturally, over time, from successful collaborations . . . which is better than trying to force an alliance into being. Don’t be afraid to start small.
As an example, I have colleagues whom I met initially at a networking event. We enjoyed each other’s company and trusted each other’s skills, so over the years we began sending clients to each other (a basic referral relationship). That has blossomed to our developing joint seminars that we pitched and presented to local banks and other institutions, which, in turn, opened up new avenues for clients for all of us (can you see the “power” that comes from a “power partner”?). We are now exploring the possibilities for products and materials that we can produce jointly. At each level, our experience working together suggested that a deeper relationship could deliver more value. By taking things step by step, we grew . . . with wonderful results!
Finally, because the law doesn’t clearly define “strategic alliances,” it’s crucial that the parties to the alliance do. Whatever you call your relationship with your “power partner,” be sure to put your expectations in writing – particularly in situations where money changes hands, intellectual property is created, and you serve clients jointly. When you have a clear understanding in writing, you can forge a powerful alliance with your power partners!
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