Building Business Partnerships
Partnerships and alliances are good for business. Big business has always known this — from McDonald’s building global co-promotions with Coca-Cola and Walt Disney, to Nike building trainers that talk to your iPhone. Business partnerships or alliances can bring significant benefits for small firms too. Many small to medium enterprises aspire to develop business relationships through business partnerships with complementary organisations.
The first thing to do is to look for businesses that are complementary to yours, such as medical centre and neighbouring pharmacy, tourist hotels and hire car providers or smash repairers and spray painters. You will then need to develop some clear objectives as to what you wish to obtain from a business partnership. Consider how the partnership can be of benefit for both businesses. It can be a great way to build your brand, attract new customers and add-value to your current business. However, it takes confidence and enthusiasm to develop business partnerships with others organisations especially those that are larger in size.
You need to be clear on what your vision is and how a proposed partnership can achieve that as well as help the target partner deliver into their vision. You need to be keen, energetic, and enthusiastic and follow some golden rules to achieve a great relationship with a business partner.
These rules include:
- Having a “win-win” intention – there’s got to be something in it for both parties.
- The target markets need to align – there needs to be a valuable alignment.
Both parties need to develop a sense of trust and understand the critical success factor for an effective partnership. In the first instance, you need to have clarity as to your objectives. Be very clear on what you want to achieve from a business partnership. This could be a broad range of results including referrals, republishing website content or invitations to be a guest speaker to deliver specialist content at client seminars to develop your credibility in front of a target audience. Consider what benefits you can provide to help your potential partner’s objectives, including specialist content on topics that are relevant to their market that will support their customer's buying process and complimentary specialist consultations, to name a few. To determine this, it is worth considering your business assets. What assets do you have in your business, both fixed assets and intellectual property assets, that you will be able to leverage to achieve success from a business partnership? Function space, specialist knowledge, great website, good social media following, large database of customers you are in regular contact with, deep customer relationships with a few large clients.
When considering the business partner ask the following questions to determine who they could be and how to approach them:
- What other product or services are your customers buying before or after they buy from you?
- Knowing what you know in your industry, which businesses would you go to if you had an additional product or service need from a business offering these adjacent products or services? Why?
- How are your existing customers hearing about you now? Are any coming from other business referrals?
- What would a potential business partner find appealing about your business assets (both fixed assets and IP)?
- When you have come up with a list of prospective business partners you could consider an alliance with, how might you go about meeting them? Check LinkedIn for mutual connections or contact an industry association and request an introduction.
- Prepare a brief overview of your product, process or service, your target market, draw the connection between your business and the prospective partner’s business and how you see reciprocal activities leading to mutual business opportunity.
- Once common ground is found, it’s very important to appropriately seal the deal. Enter into a written agreement only after all the issues have been discussed.
- You then need to continue to manage and leverage the business partnership on an ongoing basis. It’s very important that you don’t set it up and leave it to the team to operate without any ongoing involvement from senior management. It takes a long time to establish an appropriate business partnership and often measurable activities need to be agreed and monitored to achieve success.
Is there commitment to customer service as high as yours? Referrals and partnerships convey the trust a customer has with you on to your referral. If they let your customer down, a little bit of trust they had in you can evaporate.
If you would like some assistance with the development of a strategy for a business partnership vision for your business, please contact your usual Hanrick Curran advisor or call our Business Improvement Consultant Angela Winton on 07 3218 3900.