Thinking of putting up your own business or expanding your existing one? A strategic partnership is just what you may need!
A strategic partnership is an arrangement with another business that aims to benefit both parties. Through this, you can gain support to achieve your own goals for your business while helping your partner do the same. This type of collaboration can save your time and resources. Here are five tips on how you can maximize strategic partnership benefits:
How To Form A Valuable Strategic Partnership
1. Understand your company’s identity
Before entering any strategic partnership, you need to have a deep understanding of who your company is and what it stands for. You must know the strengths and weaknesses of your business, and what your goals are. From there you can evaluate which areas you need to improve, so you can look for a strategic partnership that will serve your goals.
Remember that a strategic partnership is a business strategy to help grow your business in alignment with your goals. First, figure out which specific tasks and roles need to be fulfilled. Analyze if having a strategic partner will be more beneficial for you in the long run, or if you should hire additional manpower instead. Always properly gauge how your decision can benefit your business.
Being familiar with your business will also help you when you decide to enter into a strategic partnership. When you know your needs, it will be easier to pinpoint what kind of partner you ought to have.
2. Find a good connection
Working with a business partner can be challenging, especially when the going gets tough. Before sealing the deal, make sure that you are comfortable with your prospective partner. Find a good connection and listen to your gut. Partnerships require trust and mutual understanding between the two parties involved, so it is important that you are comfortable working with each other.
To minimize and avoid conflict in partnerships, do your research first on your target companies. Be thorough—know the company’s track record and the feedback they have received for their services and products. The information you gather here will be useful to your decision-making.
Some strategic partnership proposals may seem to be too good to be true. Even if a proposal appears to be just right, you may risk uncertainty from the people behind it. If you have reservations on the partnership, it will be better to not go through with it or to cut ties at the soonest time possible. Trust is the key to getting the most out of your strategic partnership.
3. Establish clear mutual goals
Mutual understanding is essential for the strategic partnership to succeed. Once you have agreed on a partnership, the next thing to do is to create and agree on goals that will benefit both businesses. This will be based on the needs that the partner companies have identified.
To have a clear vision of where you want to take the partnership, it’s important to set your own company’s goals first. This will dictate your priorities and define what you need to achieve from a strategic partnership. It will also help prospective partners identify the best solution they can provide to address your needs.
4. Address weaknesses and leverage strengths
Aside from setting mutual goals, you and your partner should get to know each other further and identify each of your weaknesses and strengths. These factors will affect the outcome of your partnership greatly, so it is important to be upfront about them.
When you have a good understanding of each other’s shortcomings, you can create effective and efficient solutions to address them. Likewise, when you know each other’s strong suit, you can use those to leverage each other’s businesses. Thus, creating a mutually beneficial relationship.
5. Define each other’s roles and responsibilities
Lastly, you need to have a clear understanding of the parameters of your partnership. To avoid misunderstandings and oversight, the roles that each company will play in the strategic partnership should be defined. It is especially important to establish accountability as failure to do so will maximize the risk of blaming should anything go wrong.
As much as possible, every agreement in your partnership should be documented. Although strategic partnerships do not strictly require formal documents or structure, having this can certainly come in handy. This will be helpful especially to small businesses or startup companies partnering with established ones.
When it comes to strategic partnerships, remember that communication is key! Build rapport with your partners by taking genuine interest on them, even outside of business. This will increase the confidence and trust between you and your partner. Most importantly, be open to addressing concerns together as a team.
Check out this video for a successful strategic partnership:
Planning for a strategic partnership? Let us know how we can help you more in the comments section below!