Jeff Lincoln has been approached by another company that wants to create a strategic partnership
with his firm. He has never done anything like this before and was wondering what risks this may 
involve. It seems like a good idea to him, but he is not sure. 

A: It is certainly worth exploring. The right strategic partnership can be a real benefit for 
your small business. Large corporations create alliances all the time for mutual benefit:

• Microsoft and HP
• Donald Trump on The Apprentice and Toys R Us, Levis, Pepsi, etc.
• Samsung Electronics and Charter Communications announced a strategic partnership just last 
week.

So here we find another area where small businesses can tap the methods of big businesses and 
reap the rewards. The idea is to find another company with whom you could create an alliance 
that would be greater than the sum of the parts.

I hate jargon, but here it is appropriate. You need a company with whom you would have some 
synergy. In the case of The Apprentice, The Donald was in need of businesses who could offer his
would-be apprentices some challenging business tasks, and the companies needed/wanted the 
exposure his show could give them. It was a classic win-win. That is the type of strategic 
partnership you need to strive for.

Of course, not all strategic partnerships work out. Just ask AOL and Time Warner, and therein 
lies today's tale.

The first key then to creating a successful strategic alliance is to find a compatible company 
that can offer you something you cannot do alone. Say for example that you are a wedding 
photographer. A potential strategic partner might be the stationary store that does wedding 
invitations, or the bakery that creates the best wedding cakes in town. Identifying the right 
partner is step one.

The next step is to figure out how you might work together. Often, joint promotions are the way 
to go. You can offer discounts to any clients of the stationer or baker who decides to hire you 
too, and vice versa. With no money exchanging hands then, you have just created two new possible
profit centers, and you will have done so with your exact target demographic.

Even better: Your potential partner does not have to be exactly aligned with your business. 
Rather, what is far more important is that your customers are similar. I know of an upscale 
restaurant that created a joint promotion with gift store whereby anyone who bought something 
at either business got a coupon good for 25% off at the other store. Both businesses ended up 
with new customers.

Joint promotions are just one sort of strategic alliance. You could also sell each other's 
products, advertise together, cross promote, and so on. Offer them something they don't have 
and have them offer you something you don't have. Be creative.

To make sure you don't end up in a negative situation, keep these precautions in mind:

1. Brainstorm: Speak with your team and your employees. Where do they think your growth potential
lies? What businesses do they know that you might call? What sort of partnerships and marketing 
plans might work best? Create a list of possible alliance partners and marketing options.

2. Meet and greet: When meeting with potential strategic partners, discover the following:

• What are their business goals? What would be their partnership goals? Are they in alignment 
with yours?
• What do they bring to the party?
• Are they comfortable offering your information to their clients and giving you information 
about those clients?
• Do they have a similar business culture?
• What assurances will you have that they will uphold their end of the bargain?
• Would they agree to put it in writing?
• What other partners do they have or have they had?
• What results have they had with previous strategic alliances?
• Do they seem enthusiastic about the potential partnership? Will their people represent your 
company well?

3. Do your homework. Get some references from the potential partners and call them up. Make sure
any possible partner is easy to work with, keeps their word, pays their bills on time, has a 
good reputation, etc.

A good strategic partnership can provide you with leads, sales, exposure, contacts, expertise, 
opportunities and resources. It can be a mutually beneficial success story, but only if you take
the time to ferret-out the right partner with the right attitude, customers, and resources. In 
the end, finding and nurturing the right strategic partnership will take time, dedication, 
possibly some money, and trust.

Today's tip: To learn more, you might want to pick up a copy of The Power of We: Succeeding 
Through Partnerships by Jonathan Tisch.
Source: http://www.mrallbiz.com/columns/usatoday/article_2005_02_17_2423.html; January 17, 20051