7 Tips To Manage Strategic Alliances for Small Business

When I left Corporate America my principal job was managing strategic alliances and I learned a lot of lessons which apply to the small and medium business market.

Most businesses can benefit from strategic alliances but they have to be managed carefully. I would go so far as to say that most businesses should have alliances. If you don’t, there is a good chance you are trying to be all things to all clients and that is as sure a road failure as trying to make everyone happy all of the time.

Through VSELLIS I’ve partnered with several other businesses including Livid Lobster whom most of you know for their show GeekBeat and CouponCodesLady. While VSELLIS is media savvy and has a working knowledge of video production, crafting the best video possible for a client requires expertise we don’t have in house. If you need help with marketing or technology then call us, but if it involves video we’re going to immediately engage Livid Lobster to help out.

The point of all of that is to know your limitations, and where it makes sense to bring skills outside of your expertise to bear for your clients through partners or alliances. 

If you don’t, there is a good chance you are trying to be all things to all clients and that is as sure a road failure as trying to make everyone happy all of the time.

Finding good alliance partners is another matter. When you seek out alliances or partnerships with other companies here are seven tips to get it right:

  1. Never forget: An alliance is like any other relationship (including the personal kind). Companies have different personalities, different needs, and different motivations. Make sure yours are aligned on behalf of your clients and be prepared to work on the relationship.
  2. Do your due diligence: Do it as if you were buying their company but without asking them to open the books. Make sure they know their “stuff” and have a solid track record. The people you partner with must be those you can trust because they will interact with your clients and that will reflect on you.
  3. Each engagement should have ONE clear project leader. Not more, never less.
  4. Put it in writing: An alliance agreement doesn’t have to be onerous but it should protect both sides and outline the relationship. These can be done on a project by project basis if need be. Include an NDA and non-compete where applicable. Consider it a prenup, everyone acts in good faith but if things go bad or just need to end (some alliances just run their course) then it keeps things clean.
  5. Don’t pay each other or engage in kickbacks for opportunities. If you are going to be able to look your client straight in the eye and tell them that you are objective about who you work with and are acting in their best interest, you can’t be taking money from a partner for bringing them to the table. If their part of the project costs more than yours so be it, don’t let greed get in the way of good decision-making. You are doing your clients a favor by bringing a professional to the table to fill in where you can not do the best job. The tradeoff should be that when your partners have clients who need your services they will call you. If they don’t then get out, it’s not a partnership. BTW, that doesn’t mean your partners can’t hire you to work for them, but that is a different arrangement.
  6. Trust but verify. The relationship should be reciprocal and work should flow both ways. There is also no problem in having multiple partners in once space. But if you do, be very clear who your “primary” partner is and for what products or services they are primary. I was in the position of being a secondary alliance more than once and we still stayed busy.
  7. Above all work together and genuninely try to make it a win for everyone involved. If you don’t the alliance will be short-lived, bitter and could end up in lawsuits.
Alliances like any relationship are tricky, but if managed properly can be a fantastic channel for new business and relationships.
What partnership stories (good or bad) do you have?

1 Comment

  1. […] Read entrepreneur Scott Ellis’s article — top 7 tips on strategic alliances for small business, from someone whose previous corporate job was managing strategic alliances. […]

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