Do's and Don’ts for Strategic Partnering

Two heads are often better than one. That’s why many entrepreneurs are teaming up with other companies to take their business to the next level. In my experience, teaming up with another company – whether large or small – can be a great way to scale your business and take on projects that you might not be able to otherwise.  Consider these dos and don’ts for strategic partnering with other businesses for growth.

Corporate Venturing

Traditionally defined as when a company supports innovation and new projects internally, corporate venturing can also occur when a large company meets with an entrepreneurial business to discuss collaborative partnerships. This topic was the centerpiece of American Express OPEN’s Corporate Venture Forum held last fall as part of Scale Up Milwaukee. The event focused on bringing together large corporations and local entrepreneurs to discuss collaborative projects and highlight the opportunities and challenges (on both ends) of teaming up for mutual benefit.

Many large companies do see the benefits of teaming up with a small business for innovative projects, but want entrepreneurs to do their homework before proposing an idea. Some things to keep in mind:

• Do Your Research.

This involves more than understanding the company’s brand and position in the industry. It includes knowing the company’s culture and business model and where your business can provide value. Conducting thorough research ahead of time will help ensure that the partnership is a good fit for both companies.

• Don’t Expect Overnight Results.

A large, global company is not going to approach you with a clear idea of how you can collaborate. Take ownership of the process and understand that working with a company of that scale is going to take some time and patience. An entrepreneur at the Corporate Venture Forum admitted to holding more than 100 meetings with a company before solidifying a partnership.

• Don’t Make the Proposal All About You.

The key to successfully partnering with a large corporation is that the relationship is mutually beneficial and supports long-term growth and collaboration. At meetings, listen carefully so you can learn about the company’s priorities and address them in your discussions.

Teaming for Government Contracts

The government contracting arena is crowded, but that doesn’t mean you have to enter it alone. Many businesses have learned that teaming up with other small businesses to bid jointly on federal contracts can be very powerful and actually increases the chances of landing larger contracts. In fact, an American Express OPEN government contracting survey found 47% of active small business contractors reported having been part of a teaming arrangement in FY2012, up from 29% in FY2011.

Consider these tips for forging a successful teaming relationship:

• Do the Legwork Early

Lay the groundwork for a successful partnership by attending networking events and conferences to meet potential partners. You can also take advantage of business associations and government-industry groups to meet other businesses interested in government contracting. This way, you will have a solid network of businesses and government contacts available to you when a solicitation is issued.

• Do Choose a Partner with Complementary Products or Services

Synergy is vital in a strong teaming relationship. When you seek out potential partners, look for businesses offering complementary products or services. Not only will you be able to bid on larger contracts, but it can also make you eligible for opportunities that you may not be suited for on your own.

• Don’t Tackle Large Contracts Right Away

Once you’ve found a potential partner, it may be tempting to go after a large contract right away. However, it’s beneficial to work together on two or three smaller government contracts before bidding on a large contract. By starting small, both parties are able to learn about each other’s business structure, work out any kinks in the relationship, and develop a track record that will help when submitting future proposals.

Partnering with other businesses can be a great way to propel growth and can serve as a valuable learning experience for everyone involved. Whether or not teaming is in your immediate future, be sure to collect those business cards at your next networking event – you never know when you may want to call upon another company to take on an exciting opportunity together.