A “strategic alliance” is an agreement between two or more companies to conduct a certain aspect of business in a mutually beneficial way. Successful strategic alliances can help small businesses to increase the size of their product/service offering, extend their market reach, improve productivity or create that crucial competitive advantage. Ultimately, this means opportunity for faster-paced launch and earlier growth, without a burden of added capital or operating costs.
Like any business model, a strategic alliance needs research and careful planning. A successful alliance needs to fit your own business profile. Here are some key considerations:
· Create a list of desired partner attributes
· Source out potential partners with a compatible vision and similar goals
· Choose a partner who is focused and well-established
· Choose a partner with a compatible brand/reputation
· If competing in the same market, consider the affect on your market position
· Consider future directions and whether they merge or diverge
· Determine the timing – one time project or long-term relationship?
· Create a contract, including precise expectations you have established together and clear terms of payment
· Create a systematic communication method
· Create a clear exit strategy
· Put everything in writing
Finally, not only will you need to seek out a desirable partner, but you need to be a desirable partner to someone else. This has to be “win-win”, not “how can you help me?” Your own business will need to be in tip top shape with an up-to-date business plan, established procedures, a good track record with clients, professional branding and reputation, and a robust marketing strategy. If these foundations are in place, you may find other companies are seeking you out as a strategic partner. The Brampton Enterprise Centre has a plethora of resources to support you as you prepare to develop a strategic alliance.
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