How to Create a Business Partnership

When you decide partnering or creating a strategic alliance is a way that you would like to expand your business, you should consider the following steps:

1) Determine the purpose
    Think about the specific goals and objectives for your company and whether an alliance with another business would support these in the time frame you require. Consider the following questions:

• Do you want to add on another product line?
• Do you want to enter another market with your current product line?
• Do you want to increase your current capacity?

Understanding the "why" for creating an alliance can drive you to the next step...



2) Identify potential partners
    Do you currently know  and trust anyone that you would like to do business with and can help meet the determined purpose? Are there any competitors or complementary colleagues that also service your client base whom you have heard good things about? These are a couple of avenues to consider in identifying who could work with you. Other avenues include:

• Traditional networking - making the rounds during your normal routines and having conversations with those who may connect you with what you need.
• Social Media Networking - using your personal social networking profiles to seek out partners can be highly effective and extend your reach. Additionally there are online networking sites specifically for business owners which could help you connect to those who are relevant. Some of the top-rated sites are:
• PartnerUp
  
• Ecademy
• Fast Pitch
• Insidexxx (local network e.g. inside919)
  
• Contacts from your current customers - your customers know your work style and may know others who would work well with you, particularly if it is for a project that they are seeking bids on
  
• Contacts from your current service providers such as bankers, consultants, accountants, etc. - these providers also know your work style and may work with others who could work well with you.

A good balance in the use of these forums should give you a great selection of potential partners. Use a good contact management software to keep track of people you would be interested in doing business with later.

3) Choose the right partner(s) for your current objectives
     Begin conversations with those you deem necessary for your current project. Establish a relationship and determine the following:

• Do you have similar values?
• Can you trust them?
• Will each of you make a valuable contribution to the partnership?

Once you have chosen the best partner(s) for this, it's time to hash it out...

4) Create a partnership agreement
    Since I'm not a lawyer, there is not much advice I can provide in this area. A good article I have read about things to consider is "Creating A Partnership Agreement" by NOLO. This should be done for the most formal and informal of partnerships since you just never know what may happen to cause friction in the relationship. If the relationship is spelled out on paper that all parties signed, there should be little reason for conflict. Make sure you outline a solid exit strategy that is fair to all partners.

5) Get to work!
    Finally, once everything is in order, work together to capture more market share. Go after that project that you were to small to win on your own. Return to the large clients with ideas for how you can meet more of their needs.