Strategic alliances are the smart way to grow a small business. Small entrepreneurs can form strategic alliances to shore up or enhance their competitiveness in the marketplace.
Here are some tips that would enable small business entrepreneurs involved in alliances to leverage those relationships and develop win-win partnerships.
Communication is the key
While it is not vital that each partner’s goals be identical, each must be committed to a common outcome. Half of all partnerships never live up to expectations. Be honest about what you seek to gain, and what you can provide. The most common mistakes are failure up front to clearly articulate the value proposition of the alliance, mismatched goals, insufficient commitment, and inability to adjust the relationship to new business realities and flat out neglect by upper management.
Look for situations that are win/win for both parties
Participate only if you can maximize the relationship; and never when you think that the partnership cannot support your business goals.
Carefully check fees and prices
Even though your company may be small, read carefully around sharing information related to fees. You don’t want to find your company accused of price fixing. The kind of knowledge sharing that takes place between partners is essential to projects built for customers. When in doubt, consult your attorney or accountant about any gray areas of your strategic relationships.
Develop deep contacts
When cultivating relationships with large corporations, make sure that you have connections with several people in the company. Think of what would happen if your sole contact left – your company may be dropped at the next contract negotiation.
Be creative when exploring alliances
Look at your plan and how your business is growing. There will certainly be opportunities where your unique business is a natural partner for a strategic alliance.
Keep the end in mind: You are partnering with another company to expand your business and to increase your cash flow by pooling financial and managerial resources. If you have formed more than one alliance know as much as possible about your alliance portfolio and determine how the next alliance will fit into that portfolio.
Determine which direction your alliance portfolio is taking your company
Terminating some alliances may be beneficial if they are likely to lead to dependence in the long run. develop in-house capabilities simultaneously with your alliance portfolio. Remember that your firm is viable only as long as it maintains its competitiveness. Rather than depending entirely upon an alliance portfolio to sustain or improve the firm’s competitiveness in the market, retain some independence by bolstering the firm’s own capabilities and skills, creating the force of attraction instead of constantly being attracted by other firms.
Read the following articles on Strategic Alliances:
- Finding Cross-Marketing Partners: Is It as Easy-Breezy as It’s Made Out to Be?
- How to Build Strategic Alliances
- Are You Overlooking Strategic Alliances Because You Call Them Competitors?
- Wishes for Strategic Collaboration
Recommended Books on Strategic Alliances and Win-Win Partnerships:
- Strategic Alliances and Marketing Partnerships: Gaining Competitive Advantage Through Collaboration and Partnering
- Mastering Alliance Strategy: A Comprehensive Guide to Design, Management, and Organization (Jossey-Bass Business & Management)
- Strategic Alliances: Three Ways to Make Them Work (Memo to the Ceo)
- Developing Strategic Alliances (Crisp Professional Series)
- Measuring the Value of Partnering: How to Use Metrics to Plan, Develop, and Implement Successful Alliances
- 10 Tips to Increase Your Revenue through Strategic Alliances
- How to Build Strategic Alliances
- How to Work with Competitors
- Pros and Cons of Financing a Business
- 10 Strategies to Grow Your Business Without Borrowing