A recent TV program about disco revived memories of how popular 8-track tapes were at that time. My friends and I absolutely had to buy them, but it wasn't too long before I found them inadequate for my needs (I couldn't rewind my favorite soundtracks on demand!). So I moved on to the next fad: stereo audio cassettes. Fads can be fun when there's not a lot at stake. But when it's your business, it helps to look before you leap. And little by little, I'm now hearing about the fallout from "strategic alliances" . . . largely because people rushed into them as the "next new thing" without thinking it through. How can you make sure yours succeed? View your alternatives from the point of view of the end result. Do you really need to strike up an alliance? Many entrepreneurs enter into strategic alliances because everyone else is doing it, rather than critically evaluating whether they will serve their business needs. Therefore, ask instead if an alliance will get you to where your business needs to be. What are your immediate plans for the business? Is raising your profile part of the plan in order to attract more clients? If so, what kind of customers do you want to attract? Are you hoping to enlarge your existing customer base, or do you want clients in a different industry? Do you intend to offer the same product or service, or are you introducing new ones? Your answers will shape your decisions as to (1) whether this is the right time for an alliance, (2) who's the right ally and (3) how to work with them. Who is the right "power partner"? Let's say you have decided to find an ally to more efficiently get you to your goal. The next step is to choose the appropriate "power partners". These are people or companies that will help your business in a way that has eluded you. How do you go about choosing them? This goes back to the goals you have established for your business. Ask yourself these questions: - Does this person/company offer products or services that complement mine (direct competitors are often not a good power partner choice)? - Is this person/company well thought off in the marketplace? (do your research on this beforehand to not land up with a partner of ill repute) - Is the person/company participant in a business sector I want to be part of? - Is this person/company involved in a bigger business than mine, and will that affect who controls the alliance? - Is the alliance with this person/company enjoyable? What is their corporate philosophy? - What does this person/company plan to achieve from this alliance with me/my company? Do we share a similar vision? Like a personal relationship, it is best to take small steps and to check each other out. Strategic alliances are best when they mature over time and from working successfully together, rather than forcing the pace on them. It is okay to start small. Commit everything to paper. By writing down everything such as expectations of each other, it lays the groundwork for a firm and secure alliance with your power partners. This is most important when money exchanges hands or there is the creation of intellectual property, and especially so, when you service the same clients. Copyright (c) 2010 Ask The Business Lawyer
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