Partnerships can deliver sustainability

Good partnerships will improve your sustainability.

Understanding partnerships

Partnerships should not be viewed as another form of charity. It is a more a cooperative relationship between people or organisations who agree to share responsibility for achieving specific objectives. Each partnership will expect their contribution will give them a meaningful and measurable return. Partnerships with resources, expertise or distribution channels could create the support you need to grow your business.

A range of partnerships can be a critical ingredient in making your business a valuable and sustainable asset in your community. In Real Estate, they talk about Position – Position – Position. With position being the most important consideration. When it comes to business it is Partnerships – Partnerships – Partnerships because partnerships they will have the biggest potential impact.

Business partners often start businesses together with little planning and few ground rules. Sooner or later, they discover the hard way that what’s left unsaid or unplanned often leads to unmet expectations, problems and frustrations.

Avoid this and sustain a business partnership, by starting with a few simple questions

  • Does your business need any partners ‘in’ the business?
  • What do you have to offer potential partnerships?
  • How soon do you need partnerships, because timing is important?
  • What are your growth goals for your business?
  • Will you apply successful partnership principles?
  • What is the right partnership format for your business?
  • Can you leverage all of your assets?
  • How do you assure good communication in a partnership?
  • What is the expected life of the partnership and how will it be terminated?
  • Do you understand the sort of agreement that is needed?

Who could you have business partnerships with?

  • Other businesses in your community and elsewhere.
  • Corporations.
  • Not-For-Profit organisations.
  • Customers.
  • Foundations.
  • Church organisations.
  • Philanthropists.
  • Local councils.
  • Federal and State government departments.
  • Local Service and Sporting Clubs.
  • Individuals with common interests.

Often good partners are inundated with requests, yours will be just one of them. It’s not possible for them to support every opportunity brought to them. This means you need to do your homework and be well targeted and well prepared.

Mediocrity will always try to drag excellence down to its level. In setting up your partnership, don’t trade your superiority for their inferiority and never be intimidated by their size.

Looking for partnerships require the right mindset 

Choosing the best partnerships  and executing the best agreements, will be critical factors. The long hours and high stress associated with business mean that people will get to know each other very well, for better or for worse. Sometimes you have to actually work in the partnership before you know whether it will be better or worse.

Often partnerships end in failure. They fizzle, underperform, or blow up . Few deliver expected or unexpected  positive results to all parties. The reasons for this generally boils down to one or more parties having an attitude that pre-sets a course for failure.

Everybody gets excited, executives gather for much backslapping about the synergistic opportunities abounding in this, a fresh new partnership. Unfortunately, the month’s pass and nothing happens.

Most fail to deliver because they lack trust between the parties and there is a lack of commitment and accountability. Both need to be flexible, open-minded and have a keen sense of values and the cultural issues involved.

Partnerships can be risky  when  you’re not in control of all the things that can affect the success of  the partnership. What you see in partnerships depends mainly on what you are looking for. Must you set yourself achievable standards? If you suffer from perfectionism, you will have difficulty putting good partnerships together in a timely fashion.

It is important to realise that partners are stakeholders in the partnership, not in your business

They will first be focused on their own agenda, secondly  on yours. Confusion in stakeholder responsibilities can quickly lead to problems and frustrations, for both parties. Your background and circumstances may have influenced what you have achieved so far. But good partnerships will certainly change what you become. Never risk something you aren’t willing to lose.

One of the tough things about partnerships is that decisions constantly have to be re-considered. It’s in the nature of partnerships to have many moving pieces and be affected by a huge number of variables  continually impacting the viability and success of the partnership.  What makes partnerships perfect is that you still want to be there when things are not going to plan. Remember a person who chases two rabbits catches neither. Best to catch one and cook it well.

It’s helpful to have some guiding ideas. How to think about partnerships and what strategies you can approach them with. In theory, partnerships should be incredibly empowering, but without good governance, they can be a real headache.

The partnerships you will benefit from most, will be the ones that need what you are offering. A degree from the ‘school of hard knocks’ will prepare you well for putting together good partnerships. Nothing like now to take action.

Partnerships with customers can make sense

There is probably not a better way to stand out from your competitors other than for you to position yourself as a business partner. Always looking for ways to improve your customer’s business?

Help your customer’s business

When you deal with a businessperson, you can be sure of one thing: that person thinks about their business day and night. The business is very close to them. It is dear to their heart. And if you come in and talk to them and ask them questions about their business, looking for ways to help them run their business better. That customer is going to warm up to you and wants to be associated with you and your company.

Differentiate yourself from your competitors

As a partner, you should always be looking to help your customer to cut costs and improve results in his or her area of responsibility. You should look for ways to help your customer in non-business areas as well.

You should position yourself as someone who cares more about the success of your customer than anything else. Even more, than you care about selling your product or service. This approach to partnering in profit with your customer is a key way to differentiate yourself and to keep your customer for the indefinite future.

Be clear on what you want from your partnerships

  • Provision of funds and other resources, in both cash and kind, so you can develop your business beyond your capacity.
  • Improve your ability and capacity to deliver products and services so you retain and grow your customer base.
  • Reduce the cost structure of your organisation so you can become more competitive.
  • Enhance your marketing efforts due to better market access and distribution channels.
  • Bring about more efficiency and effectiveness because you need to improve the delivery of your products and services.
  • Develop new products and services because your capability and capacity fall short of what the market expects.
  • Help to share and exchange expert knowledge and information so critical to improving performance.
  • Give you additional access to technology beyond your expertise.
  • Provide additional support to your organisation’s structure and management so you can cope with the new competitive environment.
  • Enhance your research and development output so you can stay ahead of your competitors.
  • Build a critical mass so you can provide quicker responses and better customer experiences.
  • Provide additional capacity to address the larger opportunities you can see, because they are beyond your capacity.
  • Help to get new products and services to market more quickly.
  • Leverage your strengths and opportunities, for better results.

How to create successful partnerships

Successful partnerships have many attributes which should include:

  • Honesty and integrity driven by similar values.
  • Customer and people oriented.
  • Entrepreneurial attributes to keep partnerships active.
  • Inspirational so everyone can be kept motivated.
  • Visionary and strategic so no time is lost in achieving objectives.
  • Dissatisfied with the status quo because everyone wants to do better.

The place to start a successful partnership may be when you need to solve the number one challenge you’re experiencing in your business. You would be well advised to look at taking on partnerships as you are making any major changes.

It can be a very distressing time as you learn to cope with the disturbances and new crisis that may  erupt if careful planning is not undertaken. Careful consideration and planning need to be given to appropriate resource allocation in order to keep good control of the partnership.

Begin your relationship on a firm footing

Draft a document that outlines the objectives of the partnership. How the partnership will work, how decisions will be made and how responsibilities will be divided up. Partnership agreements should also include a termination clause as few things last forever.

Joint venture partnerships are one of the fastest ways to build a massive mailing list and social media following, and create a profitable business. When someone else tells thousands of their customers and followers how great you are, it’s like taking a shortcut to success.

Trust is important

Companies have proven that they can forge successful partnerships with those they don’t trust and with who they compete. It means coming to a realistic agreement on the issues and expectations. Creating an ongoing culture of learning will always serve the partnership better than any agreement.

Pay particular attention to understanding the time-to-market issues. And how they fit your plans so as to ensure both partner’s expectations as to what results can be expected and how they will be managed. Have an attitude of service in relation to the partnership.

The real value of your partnerships will be enhanced by what you do in addition to the agreement so as any problems arising will not be a concern. Problems will be in your attitude towards any concerns. You can’t base your business partnerships on the expectations on others. Know what is really important for your business’s future.

Instead of expecting something from the big company partnership. You should be focusing on doing specific things that help the big company while advancing your vision and objectives. Never expect special treatment, or expect them to go out of their way for you.

There are always forces at work that you may never know about, that will affect the  partnership for both good and bad. In difficult situations, over-invest in resources to ensure success. This is particularly applicable when it comes to early successes since this will have a motivation and multiplier benefit.

Ways to find suitable partnerships

  • Start by listing possible partnerships suitable for your organisation.
  • Research their Internet sites and other avenues.
  • Ask people you respect to recommend you to potential partners.
  • Write to possible partnerships asking them for a copy of their Partnership policies.
  • Seek organisations that have activities in harmony with yours.
  • Look for companies that want to sell to regional areas or difficult niche markets that you can address.
  • Determine what is marketable and the degree of attractiveness of your business or it’s products and services.
  • Seek companies that source their raw materials from your area.
  • Look for large companies that draw their employees from your community.
  • If you live in a regional area, look for partners who want to improve their regional / remote knowledge.

Prepare a winning proposal

It will help you to clarify your thoughts and you will be prepared should you be asked to prepare a proposal. Your proposal can be continually improved as you gather more experience, confidence and information.

  • Clearly identified objectives and desired outcomes.
  • Demonstrate clear added value for a partner. Include your unique competitive advantages.
  • The feature, benefit and advantages are clearly stated.
  • Demonstrate your ability to generate creative ideas.
  • Show that you know how to focus and address wants and needs.
  • Exceed the prospective partner’s expectations.
  • Demonstrate a clear Business Model and growth strategy methodology.
  • Clearly, demonstrate knowledge of your industry and community in which you operate.
  • Demonstrate an efficient delivery system.
  • Outline justification and cost-benefit.
  • Has a timetable for completion of  an agreement with realistic terms and conditions.
  • Address confidentiality issues.
  • Ensure the proposal is professionally presented.
  • Remember, people buy from people, not proposals.
  • People also agree for emotional reasons but may justify their decision with rational reasons that are documented.

There can be a number of parts to a good partnerships models

  • Use of marketing collateral and access to networks.
  • A list of the contributions each partner can make.
  • In-kind support with products and services.
  • Skills, information and knowledge sharing.
  • Secondment works with your business.
  • Discounted work for the business.
  • Pro-bono can be applicable so you can secure some free services.
  • Use of their plant and equipment.
  • Cash contributions.
  • Using your organisation as a collection point.

A partnership model is a structure around which partners will base their arrangements with your organisation. Approaching a potential partner simply for a cash injection of some kind is not necessarily in the best interests of your organisation or your anticipated outcomes.

Select partnerships that match your vision and objectives

Each partner must be able to meet their strategic and operational objectives, is a long-lasting partnership is to work well all day, every day. Don’t let yourself be pushed around by your immediate problems and frustrations. Be led by your dreams and what is important to your future. It is also important but often overlooked, to be talking to the right decision makers in the target organisation.

Success will come because both parties have negotiated a  structure, approach, and processes with metrics. They also have a clear commitment to do what it takes to ensure the partnerships work . Grow new opportunities for new markets and products and look at ways to cooperate to compete. However, companies can have successful partnerships with those they don’t trust and with whom they compete.

partnerships-can-be-all-over-the-world

You can choose partnerships from anywhere in the world.

 

You should be seeking mutual benefit and know you can deliver value to the partnership. As a starting point, focus on their customers, create something that their customers use and appreciate. The strategy will be about the creation and allocation of resources to the right place, in the right amount, in the right way at the right time. In order to bring your vision, objectives and actions alive, while maintaining your values.

Once the terms of the partnerships have been negotiated and all parties are on board with the new agreements. You’re ready to make it official and start working on your priority list. Ensure all stakeholders are informed. You don’t want anyone to think you are running a ‘secret society’.

What’s in it for the partnership you are approaching

Each potential partner will see different benefits in different things, including things you may not see. Make an exhaustive list of possible benefits you can offer, without qualification. Don’t undervalue the benefits that you can offer. But don’t push them too hard in the early stages. Just be a good listener.

  • Value add for their existing customers and reaching new ones since that’s what they are in business for.
  • You provide unique opportunities so you can give them wide publicity, or a competitive advantage.
  • They are looking for solid business proposals so they can achieve their own business goals.
  • Partnerships will be looking to you to raise the profile of their organisation and to help sell more of their products and services.
  • They want to reach particular audiences or niche markets because they are considered too expensive for their normal marketing methods.
  • Partnerships may be looking to attract a new, niche, different or larger audience beyond that of their normal activities.
  • They want to be seen to be doing something for the community, so they can receive some benefit, like government grants.
  • Partnerships can be interested in Corporate Social Responsibility (CSR) because it utilises their employees to deliver services to and through your organisation.
  • It is a way for corporations to give their employees first-hand knowledge of what goes on in real life, real businesses and real communities.
  • Many corporate employees simply want to contribute to their community so they see the partnership as a great vehicle for them to do so.

Following are some questions that may be asked, be prepared

  • What are the benefits to us?
  • Is your organisation Investor Ready, or ready for a partnership with us?
  • How will you manage the cash flow created by our involvement in your business?
  • What are the funding requirements for next three to five years?
  • What industry financial benchmarks do you use?
  • Have you provided for a regular income for yourself and all staff?
  • What risks do you insure against?
  • How do you manage to achieve your income budget?
  • How do you control debtors and inventories?
  • Do you have easy of access to other funds, should there be a crisis?
  • What financial reserves do you have?
  • Have you removed the tax and compliance burden by being up-to-date?
  • Is there any outstanding litigation?
  • What key financial indicators or measurements do you use to monitor your performance?
  • Do you have a strategy from the partnership and from their business?

Hire an experienced professional

Even if your relationship with the proposed partnership is amicable, it can unexpectedly go sour. While you might be working with a clearly outlined partnership agreement, lack of experience could let you down. It is in everyone’s best interest to hire an experienced professional to negotiate draw up and manage the agreement.

Working with a professional will help to ensure that your partnerships agreement conforms correctly to state and local laws. And that all parties understand and agree to the terms. The cost of hiring a professional is worth avoiding any headaches or conflict down the line over issues that were mishandled or unclear.

You must be prepared to share information

You don’t have to trust your partner in order to share information with them, you just have to decide what not to share. The partnership could involve interweaving of intellectual property from different research and development sources. A real issue is a lack of follow-through. Did each partner do what they said they would? If so, even without trust, the alliance can succeed.

Kraft ‘s Maxwell House brand and Starbucks, direct competitors, created an alliance for Starbucks to place its coffee into supermarkets. Starbucks benefited from Maxwell House’s extensive network of shelf space in major chains nationwide. While Maxwell House profited from customer desire for Starbucks-branded coffee.

Is your business ready for others to support?

Luck favours the prepared business and this does not happen overnight.  It will take many hours over many months. Of course, it will take longer if you don’t have access to expertise and your systems are not in place. Good partnerships will be looking to see if you are “Investor Ready”. http://goo.gl/FqzKV8. Become Investor-Ready and get lucky.

Being prepared, even if you think what you are offering is not enough, will be very much in your interests. Don’t leave anything to chance. You will be asked for much of the following information by the better potential partnerships.

  • A working Business Model, Business Plan and Budget should be in place because that’s what good partnerships will be wanting to see.
  • Up to date financial figures and reporting, so you can demonstrate good governance.
  • Current valuations of key assets.
  • Mature management structure in place so you can demonstrate a capacity to handle increased business.
  • Policies and Procedures in place.
  • Clear workflow processes in place using Best Practice.
  • External advisors in place so people can have confidence in you approach.
  • Strong growth and/or growth potential with a growth strategy.
  • The right attitude to new ideas and change.
  • Information Memorandums available.
  • Your intellectual Property is well documented.

There are  situations where you need to establish technical or legal detail before you can present a final solution.  Your proposal should only be a written confirmation of what has already been agreed upon. Sometimes a proposal isn’t necessary at all, just a simple handshake or exchange of letters covering what was agreed to will surfice. It can best to keep it simple so you can get started quickly, depending on the complexities involved.

Will you have an effective transition to growth?   

When taking on partnerships, some businesses find it difficult to make the transition to growth that partnerships can bring. Suddenly systems and processes are put under pressure and all the problems that were under the surface start to show up, exposing a defective Business Model.

Lead your team to install robust, efficient, scalable and flexible systems and processes required to grow the business.  You will often be expected to align and control the chaos and hundreds of activities that must be re-adjusted to efficiently operate when there is fast growth caused by partnerships.

Once expectations and responsibilities have been set for everyone, you need to confirm that any misalignments are identified and fixed.  Many find this alignment-setting process boring. Yet in its absence, you cannot understand how your business can really work under new pressures and often chaos quickly follows. Your willingness to seek people who are an expert in change management and making transitions will ultimately lead to the creation of the partnership’s value you are expecting.

When a partnership is not working out

Once the partnership is up and running, this is when differences and difficulties emerge. Maybe your partner has been offered a better opportunity, or maybe there’s been a personality conflict and you can’t get out of the partnership quickly enough. Keep in mind that nothing is forever particularly with corporations, foundations and governments because they don’t like ongoing, long-term commitments.

Business partnerships end for a wide number of reasons. Some are friendly, amicable and in the best interest of both parties. Others can come to a bitter, nasty end. If you assume your new partnership has no fundamental obligations from the start, you won’t get hurt too badly.

Large companies have their own agenda. They have no responsibility to your business beyond whatever legal contract exist. Strategies change, executives change, the world changes and you can do absolutely nothing about it, except take the pain and move on. In difficult situations, choose the safer approach. Stop, relax, rethink  and regroup. Take the hit, cut your losses and walk away.

Get your business back on track and keep on keeping on. There is always something else you can do. Start to replace negative thoughts with positive ones because the sooner you do the sooner you will start having positive results again.

Avoid some of the common mistakes people make when seeking partnerships

  • No plan, can be fatal because it shows a lack of leadership and direction.
  • There is a poor follow-up of prospective partnerships, so good partnerships slip through your fingers.
  • Activities and tasks are not clearly defined therefore management problems can be easily exposed.
  • Don’t fail to seek knowledge about the potential partnership, or their market because you will be ‘flying blind’.
  • No vision for the new world marketplace and how virtual partnerships might work will probably limit you scope.
  • Poor presentation techniques which could turn good partnerships away.
  • Rushing in without all the facts because you are desperate, which is not conducive to becoming sustainable.
  • Using unskilled, untrained people to approach partnerships so negative results are achieved.
  • Businesses have too low a skill level or product to offer, therefore of little benefit to you.
  • Not dedicating enough time to the processes involved so decision-making becomes fragmented.
  • Thinking that you can ‘wing it’ while expecting the prospective partnership to respect you.
  • Complacency when all seems to be going well, causing partnerships to lose interest, so you have just wasted your time.

Spray and pray are not the way to attract great partnerships because it generally leads to indecision and chaos. If you know who you want to work with, you can connect with the precision of a marksman using a rifle. By contrast, many people try with a shotgun to shoot at anything that moves and continue to live in hope. In wanting to increase your success, use the rifle, target your prospects and marketing efforts. Bridging the gap between your vision and the actual implementation  could propel your business into a new era.

Quotable quotes

“One of the best uses of your time is to increase your competence in the key result areas of your partnerships”. Peter sergeant

“We never have time to plan our efforts, but we always have time to fix things, or to look for something new, something that will lead us to the promised land, again….and again…..and again”. Peter sergeant

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