Teaming up with others and forging great new relationships can help you achieve far more than you ever could alone. But as with all relationships, some work well and others…not so much.
Here’s how to spot the traps and avoid them.
How to make the most of your business partnerships
Over the years, we’ve helped many businesses and partnerships thrive. When we work with companies we often start with a thorough review of the situation so we can see where we can add value. Here are the 3 top things we’ve noticed that can stand in the way of your business partnership success.
Be clear about expectations
1. Failing to define the nature of the relationship and what each party is expected to bring to the table. There are many different kinds of partnerships, from the informal “we’ll recommend you, if you recommend us” to full-on joint ventures. A lot of us are reluctant to whip out a contract on the first meeting and that’s not surprising particularly if you are friends. Honesty is the best policy – it’s in everyone’s best interests to be clear about your expectations of them, and invite them to let you know what they’re expecting from you.
At Devant, we’re all about appropriately written contracts in plain business English. We value the clear and simple communication they can provide. As Tiffany will tell you on her contract law training website, every good contract should answer three questions:
a. Who does what, when?
b. When does payment occur?
c. What happens if things go wrong?
One of the challenges with partnering is that money may never change hands. But you’ll still expect some kind of ‘quid pro quo’ – what is it, and what triggers it? Pitched as part of your partnership plan at the beginning, a simple agreement tailored to your unique situation is a vital part of setting up any kind of partnership.
Risks and rewards
2. Failing to create a solid business plan that covers the best and worst case scenarios. We’d all agree that being realistic about how things might turn out during the term of your partnership is important. But many people fail to address these in their initial plans.
A detailed evaluation of the potential risks and reward of the relationship will help your planning and decision making. Sharing this ensures everyone is on the same page when it comes to measuring performance. There’s nothing like the feeling of one partner not pulling their weight to affect the morale and the momentum of the venture. And if the partnering isn’t delivering the benefits you’d anticipated, you can say farewell and remain friends.
You can cover the performance metrics and exit routes in your initial agreement, so you’re both clear from the start.
Know when to ask for help
3. Recognising your weaknesses as well as your strengths. Most partnerships are formed when the parties see strengths and assets that the other party can bring to the table. It’s important however to see where your collective weaknesses lie and put measures in place to address those issues. For example if you’ve partnered with a company to jointly develop opportunities in the telecoms sector, and both of you have excellent and complimentary products or services but neither of you is confident negotiating and contracting bigger deals with large telcos, you might want to seek outside support.
Naturally that will give you the best chance to minimise your commercial risk and maximise your profits but it will also (and as importantly) keep your relationships with your new customers smooth and trouble free now and in the future.
How’s it going with you?
Let us know how your partnerships are going. If you’re in the early stages, one of our experienced consultants can help you set things up for success.
If things are underway and going well but you could do with a bit of advice every now and then, consider joining the Devant Inner Circle – on call commercial advice for one low monthly payment.