5 Factors in Selecting a Partnership
No matter the size of your business nor the scope of your industry, you can’t do it all by yourself. We all need help to find success. We all benefit from the advice, support and feedback of others. That’s why partnerships are essential to any business.
But how do you go about building a strategic partnership? What are the criteria that make partnerships work?
Consider these five factors when deciding if you’re ready to make the commitment to work with someone else:
1. Play the Customer
Before you can partner with another firm, you must understand and embrace what that company offers to their own clients. We obviously want to partner with people we know, like and trust, but it’s also essential that we believe that their customers are also pleased with their work. Take a look at some of their past successes. Read testimonials. Ask for references. If you’re going to partner, act like you’re going to buy.
2. Give and Request Homework
Anybody can talk about what a great partner they will be and how they will bring you lots of business, but the real work is in the details. Although the meetings might be positive, most of the value of a successful partnership happens when you aren’t in the same room. Before you even begin to discuss terms, make sure that both you and your potential partners have some homework assignments. Ask them to create something that will be representative of the work you will do together. This gives you the chance to test their commitment, accountability and competence.
3. Write a Partnership Plan
Just like a business plan is a living document that describes how your organization provides value and makes money, a partnership plan is an outline of objectives, systems and time lines. Write down expectations you have for yourself and your partners. When these details are put onto paper, they take on a new life. They begin to drive the partnership forward.
4. Run a Pilot Project
This is nearly the last step. It’s likely that you are interested in the partnership because of a specific project you have in mind. Run this together as a test at a level that you can afford to lose. The pilot project is like a prototype; not ready for full scale production, but it proves that the concept can work.
5. Draft and Sign a Partnership Agreement
Your Partnership Plan is just prospective; but your Partnership Agreement should be binding. Is the arrangement exclusive? Time-limited? Does it require confidentiality? How are costs and revenue shared? Does it apply to new clients or existing clients? These details must be written down and confirmed. And of course, ask an attorney to review this final document.
Too many businesses get into a strategic arrangements with other firms and see it all come crashing down. Too often individuals find someone else to work with and discover that they don’t see eye-to-eye after all. Consider these are five essential factors in starting a new partnership. Working with someone else can be challenging—but it also can be rewarding. Choose wisely, and good luck!