Know Your Worth
Ever heard the saying “You can’t love someone until you love yourself”? The same rings true in business. You aren’t in a position to partner with other organizations until you’re clear on your company’s strengths and what you bring to the table.
Ask yourself and your team:
- What do we do best?
- What are our advantages?
- What are we lacking, and what types of resources do we need?
The answers to these questions will reveal the types of partners best suited to your company and equip you with a clearer sense of what you have to offer. But keep in mind that you don’t want to choose a partner exactly like you; you want a partner who complements your strengths and weaknesses and can help you expand on your capabilities.
Find “The One”
Your company might seek partnerships with a variety of institutions such as vendors, service providers, or banks, but the core process for vetting them should be the same. It’s critical that both parties trust each other and are able perform to expectations, so present a realistic assessment of your capabilities.
The following questions serve as a jumping-off point when evaluating opportunities:
- Are your goals aligned? Many partnerships fail early because their goals don’t align, so it’s vital to define exactly what both of you want from the relationship. A clear understanding of each other’s interests can help you avoid the catastrophe of realizing you’re at cross-purposes after you’ve already committed.
- Is it a cultural fit? Whether or not your corporate cultures are aligned tends to fall low on the partnership checklist. However, just like family clashes can derail the most ardent romances, the wrong cultural fit can sour an otherwise sensible business arrangement.
Research from Frost & Sullivan shows that 30 to 70 percent of business partnerships fail largely due to a lack of planning, trust, coordination, and commitment. Vetting your partners to ensure that your interests are aligned helps you distinguish promising relationships from migraine-inducing ones.
For example, Starbucks and Barnes & Noble combined their individual strengths in 1993 for a partnership that made business sense. The bookseller wanted to launch in-house coffee shops, and Starbucks’ brand recognition gave the Barnes & Noble cafés instant credibility. The two companies had different but complementary goals and offerings.
A good partnership — like that of Starbucks and Barnes & Noble — will have clear benefits and may even provide exclusive access to your partners’ products, giving you an advantage in your market.
Now that you know how to find a good partner, what does a strong partnership look like? According to Harvard Business Review, corporate alliances account for nearly a third of many companies’ revenue and value. So when a partnership goes right, it can offer significant financial rewards to your company.
Here are five indicators that you’ve gotten it right:
- Trust: Regular communication with your partner signals that the relationship is healthy. Both parties can share their expertise to achieve mutual results and brainstorm new opportunities.
- Met goals: At the beginning of a partnership, you assign roles and responsibilities to each other. If you’re both meeting targets and delivering on your commitments, the partnership is sound.
- Increased sales: A good partnership boosts business for everyone involved. If you see a growth in profits, you know you chose your partner wisely.
- Leveraging resources: One of the perks of a partnership is resource sharing, which allows both companies to expand their resource base and offerings. If that process is already underway, good work.
- Feedback: As you begin a new business venture, communication is essential not only between you and your partner but also between you and your employees. A feedback loop that allows team members to voice questions or concerns will prove useful in the partner evaluation process.
In the same way that romantic relationships can either enhance your life or make it miserable, business partnerships can open up a world of opportunities for your company or make you rue the day you ever signed your name on the dotted line. But learn who your partners are before committing, and you’ll find yourself leading your industry with a perfect marriage of culture, goals, and offerings.