No matter the size or industry your business is in, forming strategic partnerships is key to increasing your bottom line. But actually forming these kinds of partnerships isn’t easy. You need to take a strategic approach to make sure that it’s mutually beneficial for both parties.
Here’s how you can form and leverage strategic partnerships to grow your business.
1. Establish clear goals
Blindly entering into a partnership without knowing what your objectives are is a recipe for disaster. It’s not an effective way to generate results.
The first step to forming mutually beneficial strategic partnerships is to establish clear objectives. What are your goals? And what exactly do you want out of a potential partnership?
Simply saying that you want to increase sales is too broad. Getting more into specifics will help you find potential partners to approach.
For example, if your aim is to increase your reach in foreign countries, you’ll want to look for distribution partners who can help make it happen. If you’re an agency and you have customers asking for services you don’t offer, you’ll need to look for partners who can fill that gap.
2. Identify strategic partners
The next step is to look for potential businesses to approach. Start by looking into your local community. Are there any businesses that can help you achieve your goals? Who do they currently partner with?
To extend your search, consider using sites like LinkedIn to find even more companies that might be willing to work with you. Tools like Reply’s Linkedin email finder provide an easy solution to contacting potential partners.
You could also tap into your own professional network. Don’t be afraid to ask for connections from friends or acquaintances even if they’re in completely different industries.
3. Decide if a partner is a good fit
Many companies are careful about who they partner with and for good reason. There’s not much incentive for a company to partner with others if there’s nothing in it for them. The same is true here.
When creating a list of potential strategic partners, identify what you can offer them. What are some of their weaknesses? Do any of your products or services complement theirs? What “gaps” do they have that you can fill?
Something else to consider is whether a partner you want to approach aligns with your core values. For example, if one of your business values is to reduce your environmental impact, you’ll want to look for partners with similar commitments.
This isn’t necessary, but taking this step can prove beneficial when you make a proposal.
4. Assess your resources
Before you commit to a strategic partnership, it’s important that you have the resources to meet your end of the bargain. For example, if a company agrees to work with you on their projects, can you deliver?
If not, you may need to expand your team or seek funding to get what you need whether that’s additional staff or more equipment. If you’re not in a position to take on more work, you shouldn’t take the risk.
If a partner can’t rely on you to deliver your end, they may end the partnership and seek other options. This could have a negative effect on your reputation.
5. Build relationships
Don’t just immediately reach out to a company and make a proposition. Take the time to learn as much as you can about the company, including what their current situation is like and what their long-term goals are.
Try to connect with key stakeholders in the company and build relationships with them. This can include sharing helpful resources and reaching out in person. Keep the conversation going before you make contact.
6. Create a proposal
Once you’ve built rapport with potential partners, the next step is to reach out and propose a partnership. Share more information about your business and why you’d be a good fit for them.
Companies will be more eager to work with yours if you create a proposal that highlights how they can benefit. If you simply talk about what a company can do for you, they’ll likely feel less inclined to agree to your proposal. They might not even bother responding.
7. Put everything in writing
Not every partnership needs to have a legally binding contract. Some partnerships can simply start as a handshake agreement. But it’s definitely a good idea to have a signed agreement, especially if money is changing hands.
With any kind of strategic partnership, it’s important that you get the terms in writing. Written agreements help prevent any misunderstandings and can settle any disputes that arise. They also protect you in the event that a partner company decides to end the relationship.
A written agreement may include details, such as what resources your company will provide, how you’ll be compensated, who is responsible for what, and more. It may also include details about exclusivity.
8. Maintain a line of communication
Once you and a partner sign a written agreement, you can’t take a “set and forget” approach and hope things will work out on their own. You need to put in the time and effort to develop that partnership to ensure things are working out for both of you.
Make sure that your company is readily accessible and responsive. Depending on how many partnerships you bring on, you might consider hiring a team to manage those relationships. Hold meetings whenever necessary to review the results and make any changes.
9. Monitor your goals
As you work with another company, you’ll want to keep a close eye on your goals. Is the strategic partnership having a positive impact on your bottom line? Or is the partnership not working out as well as you had hoped?
If not, there are two approaches you can take. You can reach out to the partner in question and ask how you can do a better job together. And if things aren’t working, don’t be afraid to terminate the partnership and seek out another organization.
10. Keep growing
Strategic partnerships are a great way to build your own brand and credibility. You can leverage those relationships to help you form partnerships with larger, more well-known brands. This will help your business continue growing.
Forming strategic partnerships is a proven way to grow your business. They help you increase brand exposure and reach new customers.
Partnering with other companies needs to be more of a priority if it isn’t already. Implement some of the tips as described here to form and leverage strategic partnerships to increase revenue growth for your business.