Partnerships are tricky, whether you looking to start a business or grow your existing one, partnerships will make or break you.
The definition ‘partner’ can actually be a polygamous relationship, with partnerships ranging from suppliers, investors, banks, financiers, contractors and joint ventures… so how do you make partnerships work for your business?
Know who your bedfellow is
Resist the urge to jump into a partnership quickly, even if it seems perfect. We often want something so bad we convince ourselves that the terms of the relationship presented are too good to be true – which they usually are. The process of choosing partners should not be based on a flashy fly-by-night presentation.
To find the right fit all aspects of the relationship need to be carefully considered and fact, based on research not opinions. The culture fit is also important, especially if it’s a close working relationship.
Common work ethic will drive results and lead to a happy place of synergy based on success. This business is your baby, so you need to love every minute of it.
Plan like a chess master
Essentially planning mitigates risk, but that does not mean it can’t be fun. I suggest you build an amazing business case, forecast sales, include orders secured or any other solid collateral that supports your venture to find the perfect partner. I often find that “big strong” suppliers have lots of competition.
Speak to them all, and gain the best position you can. The harder you work in the beginning; the easier life will be moving forward. When I restructure my business, and renegotiate with suppliers in order to stay ahead of the market, I forward commit to sales to gain incredibly good deals.
I have had many poor relationships, which all originated from positions of weakness or rushed decisions, and they all ended badly. Do it right, draw up a solid legal agreement, and you won’t need to start over again.
Manage your expectations
The easiest way to avoid disappointment is to manage your expectations. By that, I don’t mean lower them, but be aware of what a potential partner has promised to commit to. Remember, the part of the business that the partnership will service/manage is no longer 100% in your control and this makes the nature of your business more complex.
Once you have made peace with this primary risk factor, it’s time to examine the peripheries. For example, if your suppliers are instrumental in your delivery to your customer, this is a risk factor. I suggest look at back-up options; review and refresh back-clauses in contracts and build in time buffers for onward commitments.
Roll with the times
Another important fact is to consider the long-term ramifications of said partnership. Do you remember BlackBerry and the touch screen? Let’s face it, what’s good for today isn’t always good for tomorrow. This rule applies to your business regardless of age or size. Small or new, will often put you in a position of weakness especially if you have not adapted a flexible stance balanced by a killer business case.
Some may find my approach too risky in terms of future sales and service predictions, but no investment is without risk, and the bigger the risk the bigger the reward. If you believe in your business like I believe in mine, then back yourself and make the commitment.