The most common mistake that most business owners make: not working on partnerships. Everything they do is merely a short-term transaction and non-negotiable deals. But having to work that way cuts longevity and relationships, in short – it lacks foresight. At present state, we live in a highly-collaborative society and that purpose helps achieve higher goals together.
No one should be fighting on this journey alone.
What are strategic partnerships?
Wikipedia’s definition of strategic partnership
A strategic partnership is a relationship between two commercial enterprises, usually formalised by one or more business contracts. A strategic partnership will usually fall short of a legal partnership entity, agency, or corporate affiliate relationship. Strategic partnerships can take on various forms from shake hand agreements, contractual cooperation all the way to equity alliances, either the formation of a joint venture or cross-holdings in each other.
Typically, two companies form a strategic partnership when each possesses one or more business assets or have expertise that will help the other by enhancing their businesses. Strategic partnerships can develop in outsourcing relationships where the parties desire to achieve long-term “win-win” benefits and innovation based on mutually desired outcomes.
Our definition of strategic partnership is the same but in simpler terms
In layman terms, strategic would often indicate a long-term or overall aim that a business wishes to achieve within a period of time. Think of it as Singapore’s URA Master Plan which is being carefully thought out and planned for the next 10 to 15 years, and reviewed every 5 years. So now think of strategic partnership, it is an arrangement between 2 organisations of different expertise that are looking for ways to break into the different market by helping each other to achieve their end goal on a long-term basis.
How to identify what type of partnerships do you need?
First, you need to understand what stage is your business is at.
There are 7 stages in a business life cycle:
Stage 1 – Seed & Development: At this stage, your idea is still just an idea and you have not acted on it yet. The challenge right now is how will your business idea penetrate the market and create a unique selling point (USP). The early stage of development usually requires any grants that they can get or investors.
Stage 2 – Startup: Congrats! You have officially launched your product/services and is now a toddler. Now what you need is more exposure. But how are you going to achieve that?
Stage 3 – Growth: You have grown over the years with increasing revenue and customers. New opportunities are knocking at your door, but the competition is getting stiff as well.
Stage 4 – Establishment: Your business is now known to the world and has matured into a thriving company. Revenue is stable, but not over the roof. You have a standard operations procedure and business life has become a routine.
Stage 5 – Expansion: When businesses are looking to expand their revenue growth, they will start to explore into new markets and distribution channels to gain a larger market share.
Stage 6 – Maturity: As the years goes by, sales generated have been stable, however, competition remains fierce and the world is constantly evolving. This is when you should start deciding if you want your business to move back to the expansion stage or exit the market
Stage 7 – Exit: You have worked tirelessly for years and fought many tough battles against your strongest competitors. With years of blood and sweat spill, you have decided that the business is hard to maintain any further and it is time to shut it down or sell it to another company.
After identifying the stages that your business is in, you need to relook into your business plans and evaluate if any of the partnerships will be able to help your business in the next 5 year plans that you already have in mind.
What are you lacking in your business that you (1) can’t hire, (2) too expensive to deploy (3) have no other solutions?
Once you have identified the following above, you will be able to identify the type of partnership that is needed to help bring your business to the next level.
Where can you find these partnerships?
Finding a partnership for your business is easy, but finding the right partnership is tough. In fact, you can find these partnerships everywhere: it can be your vendor, someone you used to work with, during a networking session, your family members or friends, angel investors and lastly, Google.
Now that you have potentially found a partnership, it is time for you to hone your negotiation skills that will be mutually beneficial to both parties.
How do you find the right partnerships?
Finding the right partnership is like being in a relationship. Here are a few points why:
Being in a partnership requires serious commitment. This is very important because a partnership would mean money and time invested and both parties need to know how much commitment is required to make it work. In order for a partnership to work, they need to come to a consensus that they will be working on a short or long-term basis.
The right values are important in these partnerships. Good values are like a magnet – they attract good people. You would obviously want to work with someone who has the same values as you before agreeing to the partnership. With the same values in mind, it would help guide the partnership’s actions, judgements and choices. Values help to shape one’s personal and professional identities and when partners’ values align (e.g. they share a sense of work-life balance, prosperity, ambition, work ethic, or political issues) they are more likely to make similar decisions and remain united. Unless it is merely a transactional one.
Think little goals and expect little achievements. Think big goals and win big success.
– David Joseph Schwartz
What goals do you both have? Make sure that both goals align before entering into a partnership.
Character & attitude
Attitude is a reflection of character and character is a reflection of habit. If you are looking for a partnership, make sure that the partner you are looking for has the following qualities:
Find someone who gives and takes. If you and your partners are looking to build a long-term and more committed partnership, try your best not to keep track of the benefits being exchanged as it might be unhealthy. Always know that some days s/he is giving and some days getting.
Find someone who wants to grow and will support your growth. One reason why people resist change is because they focus on what they had to give up, instead of what they have to gain. Everyone is consistently moving through a process of change, it’s just a matter of whether you are willing to embrace it or shun away from it. Successful partners embrace change and growth together, knowing that this attitude benefits them both individually and as a team.
Find someone willing to engage in proactive conflict management. Whenever you are in a conflict with someone, there is one factor that can make the difference between damaging your relationship and deepening it. That factor is your attitude. Successful partners will always want to resolve matters professionally through proactive and strategic approaches to conflict management such as accommodation, compromise, and collaboration to resolve their differences.
The funny thing about partnerships is that you don’t actually have to worry if your business is a lot smaller than your partner’s. If you both are in the right fit, negotiate the right terms, you will be able to work something that is beneficial to both of you.
What types of partnerships are there?
There are many types of partnerships out there, but here are a few that we normally do:
Strategic Marketing Partnerships
This type of partnership is more beneficial for SMEs that have a limited selection of products or services to offer to their customers. Take for example Levi’s and Water.org collaborated to launch Water