Choosing & Managing Alliance Partners

At different times in the evolution of our businesses, we will all need to select, and then to manage, business or alliance partners at various times. The businesses we select to partner with can be fundamental to the success of our own ventures. It is essential that you select partners with whom:

• You have (or can build) an effective working relationship


• You share the same business ethics


• Both parties have something to gain when things go well


• Both parties are of a similar size – very large businesses often struggle to build effective working relationships with very small businesses – especially when the relationship is designed to complete an offering to the market

Managing the relationship can be tricky – especially if all the details have been left to “trust” and then things start to go astray.

Choosing a Business Partner

Before you start looking for a business partner, or even before you agree to work with a business that has approached you directly, you need to establish:

• Why do you need a partner?


• What does the potential partner offer that you cannot already deliver/ develop the capability to deliver?


• What are your selection criteria for suitable partners?


• What do you gain by working with a partner?


• What have you got to lose if it all goes wrong?


• Is the impact on both partners equal if things:
  Go really well?
  Go really badly?

Managing a Business Partner

A small investment of time at the outset to write down some of the basic details will save hours of arguing later on. The bare minimum of formal agreements (TAKE LEGAL ADVICE) must include:

• Confidentiality / Non-disclosure agreement binding on all parties


• A trading agreement which, where appropriate, defines:
  Who owns the relationship with the end customer
  Any revenue and cost sharing formulae
  Restrictions on approaching end customers directly
  Terms and conditions of business
  Responsibility for support
  …..


• Written objectives for the partnership

Best Practice

Regular, minuted, reviews with action items recorded and follow-up are also a worthwhile time investment.