Before entering into a strategic alliance, it’s a good idea to decide what it is you hope to see happen as a result of the relationship. Most strategic alliances have one main mission: to increase sales in such a way that both companies benefit. You’ve no doubt heard the phrase, “There’s more than one way
Before entering into a strategic alliance, it’s a good idea to decide what it is you hope to see happen as a result of the relationship. Most strategic alliances have one main mission: to increase sales in such a way that both companies benefit. You’ve no doubt heard the phrase, “There’s more than one way to skin a cat.” Well, there’s more than one way to approach a strategic alliance, but there are a few things to consider before you rush headlong into the relationship.
First, outline a business plan specifically for the strategic alliance. It doesn’t have to be extremely detailed, but it should create a clear picture that outlines the functions of the participants, the expected contributions from each party, and the anticipated benefits. Do some research to determine if the alliance you dream of is actually feasible in dollars and cents.
Next, learn all you can about the company you plan to approach. It doesn’t hurt to have a list of candidate companies for your proposed alliance. Think of it as interviewing to fill an executive position in your company. You don’t just want anyone in a high level position. You want someone who can get the job done. You may need to interview a couple candidates before you find the right fit.
Once you’ve found the right company, you need to find the decision maker within the company to whom you can present your concept. Finding the right contact within the sales or marketing department will save you time and energy. Or simply pick up the phone and try working your way through the corporate jungle by asking, “Who would the decision maker regarding _______.” (name whatever your project is.)
After you’ve located your contact person, submit a concise proposal. Explain exactly how the alliance will benefit both parties and if possible include a financial projection spreadsheet. Companies are always interested in the bottom line. Show them the potential profit.
When you’ve secured interest, create a simple contract that outlines who does what, how the money flows, and what the disbursement terms will be. Make sure that everyone understands the role that they play so as to eliminate potential surprises. Follow your gut. You may think a company would make a great strategic partner, but if your world view or cultures are not the same, you could find yourself wishing you’d never joined forces.
Create a clause in your contract that states you are going to start small or for a certain amount to time to test the concept. That way, if personalities or cultures don’t mesh, each of the parties is free to go their rown way with no harm done. However, if things work well, you have a contract in place that will allow you to move full speed ahead when the time is right.