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What is a strategic partnership? Sometimes called a strategic alliance, a strategic partnership is an agreement between two companies to work together in mutually beneficial ways.

A strategic partnership can help your small business develop a new product or service, gain exposure to a new target market, raise its brand profile, expand geographically and much more.

Strategic partnerships can work for businesses at almost any stage of growth, and they can range from relatively minor arrangements, such as co-marketing your products, to more important functions, such as licensing another company's technology to use in the websites you build.

How can you make a strategic partnership work for you? Here are eight steps to success.

  1. Get your house in order. Before you even think about forming a strategic partnership, your business finances, employees, systems and processes need to be running smoothly. A strategic partnership isn’t a remedy for problems in your business; on the contrary, it will bring them to light.
  2. Determine your goals. What do you want from a strategic partnership? Do you currently sell products regionally and want to partner with a company that has a national sales team to expand your reach? Do you want to offer your customers greater convenience, such as restaurants that partner with Uber to deliver their meals? Do you want access to new manufacturing methods, technologies or expertise? Knowing what you want from the relationship will help you decide which potential partners to approach.
  3. Identify potential strategic partners. Look for businesses that not only have what you need to achieve your goals but also share your business’s core values. This makes for smoother sailing in the partnership itself and also makes more sense from a branding standpoint. If your business is devoted to social responsibility, for example, you'll want to form strategic partnerships with other businesses that have the same commitment.
  4. Do your due diligence. Before approaching a potential strategic partner, check into the company's reputation online, on social media and among other businesspeople. How strong is their brand? It's also a good idea to contact businesses that the company has partnered with before, and ask about their experiences working together.
  5. Get to know each other. Once you've identified potential strategic partners, use social media and real-life connections to get introduced to key decision-makers. Before you pitch any type of partnership, take time to build a relationship. Learn as much as you can about the business’s current situation, future plans and long-term goals. This will better enable you to identify opportunities, and verify that the company is really a good fit as a strategic partner.
  6. Make it a win-win. Now it's time to propose a strategic partnership. Create a proposal that emphasizes how this relationship will benefit the other company. Of course, it will benefit you as well, but that's not what they care about the most.
  7. Negotiate terms. You'll undoubtedly go back-and-forth a bit as you work out the details of your strategic partnership agreement. No matter how well you know your strategic partner, always create a written agreement so there's no misunderstanding. (This also protects you if your contact at the partner company should leave.) Your agreement should detail the nuts and bolts of how the partnership will work. This might include which assets and resources each company will provide, how each firm will be compensated, who is responsible for what, and how the success of the partnership will be measured going forward.
  8. Keep the lines of communication open. A strategic partnership isn't something you can "set and forget," so don't just sign a paper and then go back to business as usual. Both sides must put time and energy into the partnership in order to get what they want from it. Communicate consistently, hold regular meetings to review the results of your partnership, and make any necessary adjustments.