Strategic Partnerships – What Can You Offer That Will Allow You to Grow Your Business?

What could you offer your strategic customer and partner that would allow you to grow your business, and at the same time benefit from their market knowledge? Surprisingly, the answers are pretty straightforward.

1. As a small enterprise, make sure you get exclusivity for your product or service.

When pursuing such a partnership, your partner must be willing to grant you some form of exclusivity for your efforts. This means that if you develop a product for your customer and partner, then they must guarantee to only use your product or service as part of the agreement. You in turn, will offer what you can to help them reduce costs. You must offer them an incentive to pursue the partnership and grant you the exclusivity you need to make the agreement work.

This could be preferential pricing, favorable payment terms, engineering and service capabilities, business knowledge, and even labor. These services would not only be offered to your customer and partner, but could also extend to your customer’s customers. Anything you feel could help your customer benefit from the partnership must be considered. These partnerships are the ultimate give and take. If you needed some incentive about how successful these relationships can be for small enterprises, then consider that most automotive manufacturers have extensive partnerships throughout their entire supply chain with smaller and more flexible businesses.

2. Think of what you can offer that your potential partner might need, and then set out a plan to negotiate a deal.

Let’s assume you are working with a customer that you feel could be a potential partner. As an example, you might be working with an equipment manufacturer and have a key and essential part that they have trusted with giving you the majority of their volume requirements. You are a valued supplier to them, but do not have all their business. In order to close the loop, you offer preferential pricing, volume discounts, engineering and service capabilities, and in return, you require all the volume. While a number of these companies are in the business of making and selling equipment, they may not be interested in supporting the smaller residual spare parts that go into these machines.

Doing so would force them to hold inventory of spare parts, and then send a service technician out to service these customers. If your company provides some of these essential parts, your business might be ideally suited to fill this role, and may be able to provide a vital service for your partner. The strategic partnership secures your business, and in return, your partner saves on price, service, and warehousing costs. You secure more business, and increase your market share. There are a number of possible scenarios that could work in your favor. You might expand your offer provided your partner exhibits your company logo, contact information, and specifications on their equipment and brochures. The idea is to increase your visibility within the market place and ultimately grow business. It’s a relationship that can be beneficial to both parties and can help grow your enterprise.

Two for Tea? Considerations for Successful Strategic Partnerships

Have you ever noticed or read about companies such as Google, HP and Facebook and their ability to simply consumer smaller companies, seemingly for their technology or other resources? These acquisitions are often in the millions, if not billions of dollars. Oddly, in some cases, it doesn’t seem as though the parent company is much better off – which, unfortunately, is often the case.

The truth is, just like starting a business, most of the time when two companies merge, under whatever circumstances, neither company is better off as a result. Inc. Magazine reports in an article that a third of Google’s acquisitions have failed. Forbes reports about the failure of HP’s recent acquisition of Autonomy; one would think that a company of this size, achieving its status through acquisitions, would have expertise with the process, as Cisco Systems has demonstrated.

As a business leader, you probably realize that there are two ways to expand your capabilities in the marketplace – grow it at home or go fishing for it. While growing it at home will ensure that the product conforms to the way that your company operates, a company that is already delivering the solution may be appealing because they typically have expertise in delivery and a market that they are selling to.

A strategic partnership – in its true sense – allows your company and your strategic partner to benefit from a shared vision to deliver a product (service) to the marketplace that combines both of your expertise. It would be like a private school working with an internet broadcasting company to offer online home school. Both companies would benefit s a result of the partnership.

The challenge, it seems, finding the company to work with that will be a great partner for your company. It goes back to the saying, “just because it looks and quacks like a duck doesn’t mean it is a duck.” A company that appears, on the surface, to be a good strategic partner may not share your vision, which may result in a lopsided partnership that only benefits one company or the other. This can be the foundation for everything that goes wrong in the partnership.

Like in Mergers and Acquisitions (M&A), there are a number of factors which you will want to take into consideration as you are building the relationship:

1. Share the vision – both companies need to have a shared vision for what the goals and outcomes of the partnership should be. Here is the thing – that means that all cards must be on the table, and you must be honest with one another. If communications fail, the partnership will fail. If vision isn’t united, walk away.

2. Be realistic – there may be a great opportunity to work together, but as mentioned, there is a great chance that the relationship could fail. You need to determine how much you can afford to invest (read – are willing to lose) into the partnership. If you cannot commit enough for the partnership to work, walk away.

3. Set your framework – Your framework, for all intents and purposes, your framework defines what you need to accomplish and under what parameters they can be accomplished. You are thinking strategically about your business; your new partnership needs to contribute to your company strategy. There will be all kinds of opportunities that will take your eye off the goal – which could potentially put you into a place where you are unfamiliar, which could ultimately lead to your failure.

4. Be committed – Certainly – life and business continue, and you typically can’t get off the bus for a little while to work on the partnership. However, if you wish to accomplish something, you must move, intently, toward making it happen. At the same time, you need to get that from your partner. Keep in mind that different personalities have different “paces.” Answer for yourself “can I work with this person?”

5. Exit strategy – know under what circumstances you will need to walk away. This might look like a revenue, profit, product delivery, market reach or any number of criteria. This goes back to understanding the risk. One activity that continues to make businesses impact personal lives is when business leaders don’t know when to retrench, take a step back, then move forward with a more strategic approach.

6. Have an agreement – While the legal community would call it a CYA policy (Cover Your Assets) – which it may contain, having an understanding of roles and expectations written down provides accountability to each company to a) provide structure and b) to help to measure the success of the venture.

7. Plan to learn – success or failure of the engagement will provide an opportunity to learn more about your competencies, refining your capabilities as a strategic partner and refining your ability to choose a great partner.

Strategic partnerships can be extremely beneficial to helping your company expand capabilities and increase market share. They shouldn’t ever be gone into haphazardly. As an extraordinary company, finding new ways to serve and reach your market is your primary goal and responsibility.

The Importance of Strategic Partnerships In A Nonprofit Organization – Growth and Sustainability

In 2010, I expanded my nonprofit Science, Engineering and Mathematics Link (SEM Link) to a national nonprofit organization by relocating to the San Francisco Bay Area. Since the organization’s inception in 2005, we have developed a strong program structure that has enhanced the math and science educational experiences for over 1000 Metropolitan Atlanta youth. I realized that our organization was introducing math and science to students and providing resources for educators and parents in a unique and innovative way; therefore it was time for the expansion of our programs. While looking at other nonprofits organizations that have been around for several decades had a national presence and strong strategic partnerships. I wanted to model my organization after those successful organization so that we can achieve our vision of “unveiling potential for exposure” for more students around the country.

When starting a nonprofit organization there are many steps that go into turning the idea into a business and developing operational and program structure. Developing strategic partnerships is the last thing on your mind, you just want to get the organization up and running based on your business plan and your vision. However, once the nonprofit is operating and you’ve accomplished most of the things in your initial business plan, it is time to think about growth and sustainability. In the first 5 years of a nonprofit organization’s existence, you are just trying to get resources to implement your programs and develop your brand. The partnerships you establish aren’t strategic because you align yourself with anyone that is willing to take a chance on a new nonprofit organization. You don’t always pick organizations or corporations that allow you to stay true to your mission or achieve the goals for establishing the particular partnership. But after a few years and successful programs under the organization’s belt, one’s brand has been developed and you can put more thought into your partnerships. You realize that your partnerships are key to taking your organization to the next level, from a start up to sustainable organization.

Strategic partnerships are called that because of the planning that goes into identifying and developing those relationships. The strategic part of establishing partnerships is analyzing your brand, your goals and your current resources; then finding organizations that will allow you to get the things that you need in order to take your organization to the next level. But partnerships are about what you can bring to another organization to help them with their brand, achieving their goals and enhancing the resources available to them in order to help them achieve their goals. A great partnership allows both organizations to do that and is a win-win for both. A nonprofit strategic partnerships should be established are with community organizations, corporations, academic institutions and government agencies,each of which have their specific role in helping a nonprofit organization achieve its mission.

Corporate partners are important because corporations, government agencies and colleges and universities provide valuable resources for nonprofit organizations. Corporate partnerships provide resources such as volunteers, in kind service and good donations and financial contributions, that are critical for program implementation. Colleges and universities provide a special resource for youth serving organizations because it provides volunteers closer to the student you serve to provide role models for college preparation and career exploration. In addition, hosting events on college campus provides students with an opportunity to visit a college campus, which not every student has an opportunity to do. The right corporate partners not only provide resources for your organization, but can help the organization build its reputation to get additional resources. I’ve personally experienced with my nonprofit establishing a new corporate partnership with a company because of the companies that were our existing corporate partners. Corporate partnerships aren’t limited to large corporations; small and medium sized businesses make great corporate partners as well.

Nonprofits provide their corporate partners with an opportunity to implement their corporate social responsibility plan in its community. They provide an opportunity for its employees to give back to their community by volunteering. There are many consulting firms that volunteer their employees expertise to provide nonprofit organizations with service such as public relations, marketing plans and other services that they could not afford. Nonprofit organizations also provide corporations with an opportunity get tax write off when they make financial contributions to the organization. The final thing that nonprofits provide corporations that they partner with marketing and advertising opportunities; most nonprofits list their corporate partners on their website and other promotional materials

The key to nonprofits establishing strategic corporate partnerships is having the infrastructure to attract and maintain these relationships. The first step in this infrastructure is to have a message that informs corporations of who you are, what you do as organization and how they can help. Corporations have various resources and interests, so be sure to give corporations options when asking for their help. For example, when asking for a financial contribution have various levels for receiving donation with each level having rewards based on the amount of the contribution. The rewards for financial contribution should not be equal, the more a corporation gives the more rewards they should receive for their contribution. In addition, do you research when soliciting corporate partnerships, don’t approach any organization that doesn’t historically support initiatives that are related to the mission of your organization. Also know how an organization provides support, there are some corporations that will never make a financial contribution, but will provide in kind service or good donation that are just valuable as a financial contribution to your organization.

The second type of strategic partnerships that are important to growth and sustainability are community partnerships. Community partnerships are relationships with other nonprofit organizations that provide an opportunity to enhance your programs. There are two type of community partnerships, complementary and cross promotional. Complementary community partnerships are those organizations that allow you to directly implement your programs. You and a complementary partners may establish a relationship because one of your offers a program that one of you all need to enhance your programs. For example being a math and science educational organization, SEM Link has established programs with organizations that have after-school programs for youth in order for those organizations to add math and science to their programs. A complementary partnership, may be an organization that you both offer similar programs, but you want to collaborate to combine your resources to increase the impact of both organizations.

Cross promotional community partnerships with other nonprofit organizations provide an opportunity for both organizations to increase the awareness of their organizations through the relationships. There may not an opportunity for these organizations to collaborate on programs, but they can pool resources that will both organizations to grow because they are in the same sector and serve the same target audience. This relationships allows both organizations to promote their brand and possibly increase participation in their programs. For example, SEM Link is currently establishing a relationship with an online community for high school students. This relationship won’t allow us to offer programs, however high school students will be aware of our organizations and we can promote our programs for high school students on this online community. In return, we will provide the organization with math and science educational content and help create a segment in the online community for students that have an interest in math and science.

They key to establishing strategic community partnerships is ensuring that it is a win-win for both organizations. If the partnership will not help build both brands, enhance organization’s programs, increase the organizations outreach to its target market it, it isn’t a good partnership. The key to a successful partnership is that both organizations benefit. There are times, especially with smaller nonprofits, when you will enter partnerships with an organization and there isn’t as much benefit as you thought it would be by aligning your organization with that organization. Another tip is when establishing partnerships, you must go into the negotiations knowing what your needs are from and what you can give to another organization. Once that is established, it is important to establish a partnership in writing by developing a partnership agreement. It is good idea for an attorney to draft a general partnership agreement for you, that you can adapt and adjust for each partnership. Finally, ensure that you advertise that relationship by writing a press release when it is established as well as list that partnership on your website and other promotional materials.

In this country, there are plenty of nonprofits that are doing great work. However, they aren’t serving as many clients as they can because they aren’t as diligent as they should be with establishing partnerships. Therefore many of them are reducing their program offering or closing their doors, when they are meeting such a great need in the community. There is no organization that will be able to survive if they try to achieve their mission without establishing partnerships. Partnerships provide resources and relationships that allow one’s organization to achieve its mission. As you think about your organization, what you want to achieve and how you are going to achieve that mission for years to come, you must think about how can I get all the resources that I need. If you want your organization to be sustainable and be able to handle the growth that comes when you successfully implement your programs and marketing and public relationships strategy; you must think about partnerships. The more strategic you are about establishing corporate and community partnership; you put your nonprofit organization in a position to not only survive but thrive.