Choosing the Strategic Alliances that Are Right for You - By: Nina Kaufman

As I channel-surfed the other night, a VH-1 documentary on disco reminded me of 8-track tapes. When all of my friends had them, I absolutely, positively had to have them, too. But very quickly, I realized that they didn't meet my needs (I couldn't rewind and replay my favorite parts of the Star Wars soundtrack), so I was on to the "next new thing" (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?

Rather than rushing into strategic alliances, start with the end result in mind. Many business owners strike up strategic alliances just because it is the thing to do, without thinking through whether the alliance will serve the needs of their business. Neither do they consider if the energy involved in maintaining these alliances will be or won't be well spent. Ask yourself if an alliance will help you achieve desired results.

What do you want for your business in the short run? Are you planning to be higher profile to get more clients? Are you looking for clients similar to what you now have, or you planning to find clients in a different marketplace? Are you planning to offer these clients your existing products or services, or are you introducing new ones? How you answer these questions will help you decide (1) if an alliance will work for you (2) if so, who should you team up with and (3) what is the best strategy to working 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:

- Do the products or services offered by the person/company mesh well with mine? (check to see you are not in direct competition)

- Is this person/company well regarded in the marketplace? (check this out before hand as you do not want a bum as an ally)

- Is the person/company in a market sector that I want to be involved in?

- Is the person/company a bigger or smaller business than mine, and will it matter who runs the alliance?

- Do I have a good relationship with this person/company? What kind of "corporate culture" do they have?

- What is this person/company planning to get out of this collaboration with me/my company? Are our goals compatible?

With a new alliance, it is okay to start out slow. It is better to let the strategic alliance develop naturally on their own rhythm, rather than forcing it to grow. A modest start is fine.

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

About the Author

Want to save time, money, and aggravation with pesky business law issues? Award-winning business lawyer and Entrepreneur Magazine online columnist/blogger Nina Kaufman has user-friendly business law resources for entrepreneurs that demystify legalese. Get your free copy of her Entrepreneurs Business Law Primer from GreatBusinessLawResources.com

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