As your business strives for growth, especially when resources are tight, it makes sense to find partners, both large and small. From bloggers partnering with companies to promote products to large corporations agreeing to publicly do business together, partnering can confer a certain set of obligations and benefits to both sides of the partnership.
Many entrepreneurs need partners to take their businesses to the next level. Partnerships are powerful and exciting – but when businesses get it wrong, sadly they usually realise when it’s too late. How do you negotiate the complexity of finding the right partners and make sure that you are getting the best possible deal for your business?
Bigger isn’t always better
There is a tendency, when searching for a strategic partner, to think that the bigger the potential partner, the better the outcome you will receive. After all, big partners have the needed resources and access to the market, and they will clearly share all of that with the companies they work with to maximise distribution, right? Maybe not.
It’s worth remembering that you will usually get the best outcome from the most aligned partner, not necessarily the biggest.
For example, many tech companies feel sure that they need to move to Silicon Valley to find their perfect match. But many investors like Karim Faris have started speaking publicly about how they like to look at emerging marketplaces for under-appreciated businesses. “It just feels like you can be a lot more thoughtful recruiting where there’s no frenzy. I like going and looking for entrepreneurs in those pockets,” he says.
Big names might still make it to your dream partnership list, but remember that there was a time when the world didn’t know the names of Cher Wang, Mark Zuckerberg, or Oprah Winfrey. Don’t discount the up-and-comers just yet.
Plan for what ifs
When you partner with another company, make a plan for your business on what will happen to it if ever the partnership goes south. Any important partnership requires a contingency plan. How will you try to save the partnership or indeed the business? Can you refer to the partnership agreement to remind your partner of their obligations, and move forward?
Financial experts refer to the four Ds of contingency planning: death, divorce, disability, and disinterest. If any one of these factors affects your business, it is helpful to be able to refer to a legal document which explains how your partner will be compensated for the work they have done to date.
Without these details laid out ahead of time, you may be looking at costly legal action, which could ultimately tank your business, and your personal finances. Your contingency plan doesn’t have to be immediately actionable, but it should let you know what steps to take if your partnership stops benefiting your business.
Strategic partners are not your friends
Even though you might go into business with a close friend, family member or your spouse, during work hours, that person is strictly a strategic partner – until proven otherwise. This works both ways; check those feelings of family and friendship at the door, and leave work at work. While it’s very important to build relationships and rapport with your partners, remember that until you really know this person and the company, it’s wise to do your due diligence and keep things professional.
But many people these days go into business with someone they met at a conference, or through a mutual friend. How do you learn about that partner’s background and behaviour? How can you vouch for them in business?
- Ask for references. If your potential partner has been in business before, ask who they worked with, and who you should talk to about their experience. Just like any other work position, references are important. This is why it’s so important for any business (including yours) to build a reputation for being a strategic partner of choice.
- Look for them on social media. Business people should be aware that their public profiles are their brand statements, and as such, it is worth looking to see what they put out there to their followers. How do they handle disagreements? Do they look to educate people, or merely to toot their own horn? This will tell you a lot about someone’s values.
- Look for reviews of previous businesses through credible review sites. Are there positive or negative reviews? Were they responded to appropriately?
One way to connect with the right kinds of partners is through companies like Partners2Grow. We exist to help your company find strategic partners that will help your business grow to the next level, and that are ready to work just as hard as you are.
The right business partnership can mean that your company can achieve loftier goals than you ever considered, but the wrong partnership can act like an anchor on your business, dragging you down when you should be sailing on. Choosing the right partner involves research and consideration, but is easy when you know how. Get started today and find a new definition of success for your business.