One of the best business growth strategies that will extend the reach and revenue of your company is creating strategic partnerships. By forming strategic partnerships with other businesses that offer complementary products and services, you can cultivate a mutually beneficial relationship that will help both of your businesses grow. However, as powerful as a great strategic partnership can be, the downside of the failed partnership can be very painful both emotionally and financially, so here are a few ideas to help you make sure that you put yourself in the best possible position for developing a positive and successful strategic partnership.
How to Use Strategic Partnerships as Business Growth Strategies
Go for the Win-Win
The first step is to make sure that there is truly a synergistic, win-win relationship between the products and services your business offers and what the partner’s business offers. Some classic examples might be:
- A tire store that creates a partnership with the detailing firm
- An accountant and corporate attorney who refer business to each other
- A fitness club that creates a partnership with an athletic clothing store
- A house painter who strikes up a partnership with a handyman
The goal is to figure out with whom you share the same customers and find a way to combine your services for even greater value to those customers.
Connect on Core Values
Once you have determined who would be a good strategic fit, the next step, which is possibly the most critical, is determining if you would have a good “values fit” with that company. How well your businesses complement each other will not matter at all if your strategic partner does not share the same core values that focus on honesty, integrity, customer service, and business professionalism. Therefore, it is essential that you take the time to truly discover as much as you can about the potential partner and to share as much information as possible with them in an effort to know and understand each other deeply, all before you begin a partnership.
Plan for Every Possibility
Once you have established that you have an absolutely superb fit with the core values of your companies, the next step is to discuss and write down extremely clear expectations for what the partnership will entail. It is imperative that you do this at the very beginning of the relationship, before anything has gone wrong and before there is any emotion involved. Unclear expectations about how the partnership will work, such as how the money will be divided, how you will deal with problems and issues, how you will share customers, etc., is the single biggest cause for partnerships to end in litigation. Sit down together and write out every possible scenario you can think of and then come to VERY clear agreements on exactly how you will address each of these circumstances. If you do this before you do any business at all together, you will spare yourself many sleepless nights and many throbbing headaches. Shared values, transparency, and clear expectations are the hallmark of lasting business partnerships that serve as successful business growth strategies.
Lastly, it is important that you keep the lines of communication open between your organizations by scheduling regular meetings to check on progress, review issues, and revisit your partnership agreement. These meetings help to make sure that everybody is on the same page and is highly pleased with how things are moving forward. These meetings should be held weekly, or at the very least monthly, to make sure that you catch problems before they become big and messy. A phrase I have used for a long time to describe this thinking is: “Kill the monster while it is small.”
Strategic Partnerships For Strategic Growth
When done correctly, strategic business partnerships can have a huge and positive impact on your company’s success by allowing you to increase value to your customers, increase market share, and increase wallet size. However, when done poorly, they can also destroy a business. So follow the steps listed above to help optimize your ability to establish successful and enduring strategic business partnerships.