Creating business partnerships is a wonderful path to helping your business grow by leveraging exposure, accessing more customers and reaching new markets. By definition, a business partnership is “a form of business where two or more people share ownership as well as the responsibility for managing the company and the income or losses the business generates.” Here are a few core points to remember when setting up a new business partnership.
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1. Stay authentic to your values.
I have found that the best strategic partnerships usually find creative ways to expand audiences while remaining authentic to their values and core mission. When thinking about what type of partners you want for your business, consider starting with a core values exercise. Think about your own personal values and the values you have created within your company and your culture. How do you define your brand? What is most important to you within a partnership? What are your nonnegotiables? Create your ideal list of what you are looking for in this business relationship.
2. Make sure the partnership is win-win.
Once you have clearly outlined these points, you are ready to start defining the partnership itself. The most important part of a successful partnership is to find a way for both parties involved to win. If the relationship is in alignment with your values, and if you are both bringing something to the table, then it is going to be set up for success.
The most successful partnerships I’ve experienced throughout my career worked because both sides equally contributed, showed mutual respect, and dedicated time and effort to make them a success. One-sided partnerships often fail or are short-lived because only one business was taken into account. When two companies come together and outline their vision and objectives and map out the strategy to achieve them together, not only is there a better chance of success but also a path forward to create a long-lasting and sustainable relationship.
3. Plan for bumps in the road.
Oftentimes, we focus on the ideal outcome and definition of “success” or “win” of the partnership, and we don’t focus on the tough moments. I’ve found that when you outline from the beginning a strategy or a plan to handle any disagreements or misalignments you are literally “weatherproofing” the partnership for any storm that may come your way. You have a vision on how you will navigate the good and the bad, ultimately establishing great communication.
4. Dream big together.
Another wonderful way to make a partnership successful is to dream big together. If you get the opportunity to pool resources and amplify each other’s support, you have the opportunity to grow and problem-solve along the way.
5. Define KPIs.
Defining strong key performance indicators (KPIs) and returns on investment are also big parts of the equation. KPIs are “the critical quantifiable indicators of progress toward an intended result. They provide a focus for strategic and operational improvement, create an analytical basis for decision-making and help focus attention on what matters most.”
It’s important to set realistic and tangible KPIs instead of just making things up to make yourself or the business look good. Be realistic, be authentic, and set goals that you know you can achieve. Even if you don’t think they are large or impressive enough, know that you are taking a step in the right direction.
KPIs should be aligned with the overall business strategy and outcomes. For example, let’s say you have a goal to increase overall revenue 20% by Q3 of this year. In this case, your KPI might be to increase customer leads by 50% by the end of Q2.
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6. Define ROI.
Without continuous feedback from dependable data, companies lack the information needed to properly evaluate partnership performance. Return on investment (ROI) is “a method of comparing the amount of capital generated with the amount you invest in a particular business, project or marketing campaign. The ROI is a way to analyze the company’s financial standings and the success of the project you invested in.”
It can also represent what this partner is actually going to get out of the relationship from a data and numbers perspective, such as achieving a large number of online hits, growing their social media, doubling their CRM system or acquiring a batch of new customers. Measuring partnership ROI is important because it helps uncover quantitative value, drives stakeholder opinions and helps prioritize projects. Here is a basic formula to calculate a project’s ROI:
ROI = (Net profit / cost of investment) x 100
For continued growth and success, it’s important that both companies continue to evaluate this information. When a partnership is operated with balanced commitment, it can bring great returns. By knowing each other’s “wins,” you can work together to ensure that both sides are going to rise up and reach their goal, creating space and opportunity for a longer-lasting business relationship to be forged.