How can strategic partnerships help my business grow?
I feel as though my growth has been plateauing and I am considering looking into strategic partnerships to help my business grow. How do I go about finding business partners and what should I look for?
Strategic partnerships are a great way to grow businesses. However, do keep in mind that strategic partnerships require attention and time to keep them healthy. Unfortunately most of the ad-hoc partnerships fail while most of the structured partnership succeed.
You might want to download my free ebook "Successful Partnerships & Alliances" on the topic: http://simoons.com/ebook I think it will be a good starter.
First, You have to identify potential partners with whom develop long- term and mutual-benefit relationships based on three goals: optimize your business model, acquire resources or reduce or share risks. All aimed at creating value for you and your customers.
Depending on your own goals, you should on the one hand, look for strategic alliances that help you take advantage of economies of scale in order to optimize your resources, for example, to reduce costs by outsourcing processes or sharing infrastructure . On the other hand, you might partner with other companies that are not competing directly with you but have knowledge of a market you are interested in getting into. As a result, you would have a positive impact on your cost structure and increase your base of customers, which in turn would boost your growth.
I'm also trying to develop my 3rd business. If I were to go out to find a strategic partner, I'd first evaluate my need - whether it is really a need and if yes, how critical is the need?
Are you available to open your business doors and "closets" to someone else?
At a very basic level, you are trying to bridge the gap between what you sell and what (new) customers buy. Customers buy much more than your product - they buy availability, they buy finance terms, they buy from trusted sellers, etc. Often, for product businesses, they are also buying installation and maintenance services, training, and so on. In short, customers buy a lot more than you want to sell, often because the "extra" stuff are things you can't deliver efficiently. That extra is where the partners come in.
So start by understanding what your potential customers want to buy, from whom, under what terms, when, where, etc. Carve out what you can deliver efficiently with some unique advantage. Then find (types of) companies that can deliver the rest. Go talk to them - you'll find that it's easy to structure a deal where your 1 and their 1 can be brought together to make 3.
Strategic Partnerships will help you do business with people you would never come in contact otherwise. SPs also give you opportunities to help others. Helpers get helped. You should find Strategic Partners that you can help, they will in turn help you.
Joint ventures or strategic partnerships are a great way to grow your business provided both parties are willing to help each other. For example, I am a business coach and I will email my list for other joint venture partners provided they do the same thing for me. It's a win-win situation. I know people who have grown their list by thousands of people.
First let's get beyond the obvious, make it a win win proposition yadda yadda yadda...the generalities of partnerships are simple, you want someone to promote your product and gain you growth, and they likely want the same in return.
1. First thing is to create a profile; just like you target ads on Facebook, target your strategic partnerships by market, industry, audience, relationship status (do they partner with anyone else, if not, you're the first and that's a harder sale0
You want to know what level of revenue, what type of customers they have, and if they are a direct competitor to you.
2. Find businesses you truly respect, which means do your diligence. Don't just go out there with a general idea, and pitch and email.
They need to know, like, and trust you. The first contact is building awareness, next contacts are for getting the to like you, and vice versa.
If you or the partner don't hit it off, move it on, and make sure you expedite this, don't do the partnership dance hoping it will work.
A good partner will work because you two can communicate, your goals work together, and both sides see a reason to expend the energy into doing it.
3. Get creative in the way you can contact them at first; I've done things like send an unusual physical mail to their address, a movie poster for example of a business idea, something intriguing to spark their interest and set up a phone call if this is cold.
4. Interview them for a podcast related to your business; you can get CEO's to talk about their business, everyone likes to talk about their business, and listen to them. You do the interview not just for content, but to build a relationship. Many you won't hit it off with, some you will - I've created tons of strategic partnerships with this method, because after the call, if you both like the style of each other, there's room to talk, if not, walk away and it's not a waste of your time or theirs.
5. Once you get beyond first contact, have your follow up ready, your white papers or numbers they can crunch. Ask them what they need - more customers, exposure, something that makes it worth while for both to participate.
6. Set up a test phase; test before it gets serious, then scale upon proof; make them and you prove it to each other, and tell them this. Set up a test run for 30 days and see what sticks, you'll know it when it does, and this is rare.
7. Remember the 95/5 rule; 5% of your partnerships will generate the lion's share of revenue, the rest will not, for you or for them. Knowing this, make the strategic partnership part of a selection process for both of you, and give each other an easy way to test the waters.
Finally, remember the old adage, your competitors are partners and your partners are competitors. I've seen tons of big Internet companies balk at working together, but when they do both grow.
Just make sure you're in a market where one brand doesn't control over 50%, like Google controls search. Take the Amazon approach; the reason they went into books first is because the big players only owned maybe 10-15% of a market.
Those are the markets where partnerships are readily available, approaching monopolies doesn't make sense unless you want to get acquired.
I saw Amazon take this approach with Shelfari, who sold books; they saw them, saw sales, engaged them, and over time built a relationship. Then they acquired them upon hitting benchmarks.
I wasn't part of the deal, this is from the outside looking at it, but what they did was create a partnership that had to prove itself, and if it doesn't within a fixed amount of time, move on.
So many try to create partnerships by basically getting married, when you should do a bit of dating, go steady with those that fit our scenario, and marry the 5% who do, in terms of strategic partnerships...
Byran, take a look at your industry and see who else also deals with your clients. This can be people who are not in direct competion with you that your products/services could enhance theirs.
It may even be a competitor that offers something different then you but their clients could benefit from using yours as well.
When you find someone to talk with don't go in with the idea of them working with you right away. Instead go to them and ask; "How can I serve you." and don't look for anything in return.
When you do this, you'll blow their minds because everyone else comes and says please oh please carry my products I need the business. With you coming in not asking for anything in return 99 times out of 100, the law of resciprosity sets in and they ask how can I help you.
Now you have a chance to talk. When you do start talking always, always talk BENEFITS, BENEFITS, BENEFTS. - what's in it for them.
Hope this helps.
John D. Allen
They can offer immediate growth in the combined clientele, skills and financial resources. Always consider the real value of what a partner can offer. Ride on a bigger brand and sell your uniqueness to them. Be careful of brand dilution. Have a performance clause for all contracts to ensure that you are covered in the event of non performance by the potential partner