By: Amarpreet Kaur
Did you know? On average, each fast-growing company is engaged in 5 different types of strategic alliances. Having knowledge of how to strategically partner with another business is a critical factor in ensuring that your start-up is successful.
“Businesses once grew by one of two ways; grass roots up, or by acquisition… Today they grow through alliances – all kinds of dangerous alliances. Joint ventures and customer partnerings which, by the way, very few people understand.”
Peter F. Drucker
Partnerships can often be what entrepreneurs need to accelerate the growth of their business. Whether this is through leveraging your brand to provide greater exposure, or providing capital to reach a key business outcome, strategic partnerships can positively affect the trajectory of a startup.
According to Louis Sapi, CEO and Managing Partner of HS & Partners LLP and a Altitude Accelerator Volunteer Advisor, there are five steps that entrepreneurs must think about before striking a new partnership or alliance:
- Identify key factors that your company needs to achieve to be successful
- Strategic alliances can be a very successful way to access new markets, new clients or pursue a pivot. At the end of the day, you want to increase profitability for stakeholders.
- From those key factors, identify the ones that would benefit from an alliance
- “If you do not seek out allies and helpers, then you will be isolated and weak.”
Sun Tzu, “The Art of War” - If you know your objectives well, it greatly improves your chances of a good outcome. Pursuing a partnership means benchmarking the success of the project and understanding what you want to get out of the relationship. This can only be possible if you know your goals and how other organizations can positively complement them.
- “If you do not seek out allies and helpers, then you will be isolated and weak.”
- Determine if you have any connections within your industry that could become potential partners
- Once you’ve identified the key factors, now you know what you’re looking for. Create partner selection criteria including areas such as: potential for impact, compatibility, alignment of goals and strategies, risks, etc.
- Reach out to your industry network to get warm introductions to potential partners
- Ask your network to recommend businesses or organizations that have credibility. If you do your research on the company and their results, ask for a warm introduction to help make a great first impression.
- Meet with different organizations and present how they can benefit from partnering with your startup
- Once you’ve found a potential partner, you need to establish a good relationship with them. The best way to do this is through communication, outlining objectives, and managing expectations. How will both companies benefit from the alliance? If you ensure high confidence levels on both sides, it’s easier to deal with unforeseen issues or changes as they come up.
Do you have more questions? Louis Sapi, CEO and Managing Partner of HS & Partners LLP, will be speaking at Altitude Accelerator’s Lunch & Learn on Strategic Partnerships and Alliances on June 22, 2015! Louis will stress the importance of how to create a plan to make an alliance or partnership actually happen. Register now to hear from an expert with over 20 years of experience in forming strong partnerships.