Strategic Partnerships: 5 Tips to Bag a Big Deal for Your Small Biz
It seems that almost every day we read about a new strategic alliance between some large company and a much smaller one.
You may wonder -- could something like this work for my small business? Or perhaps one of these "elephants" has approached you about a potential partnership, and you need to figure out how to respond.
Here are a few tips to help you bag your elephant -- and to keep you from getting trampled in the process.
1. Be clear about your objective. What aspect of your business are you looking to develop more fully (to "leverage" in alliance-speak), and what do you need to achieve that?
Do you have great products, but you lack distribution? Do you need access to overseas markets? Do you want to sell a solution rather than individual components and preempt competitors? Do you want to leverage the intellectual property you have developed but find too expensive to fully exploit?
2. Understand what they want. It's a cliche, but it's worth repeating: The right partner not only has what you need, but he needs what you have.
You must be able to look at your company as a potential partner does to understand how they see the value of a deal with you. They may want to complement their channels and mature products with your specific technology or products. Or they may be looking to integrate your technology into their products or platforms. Whatever it is, make sure they see value in you, or you won't get much from the deal.
3. Decide what kind of an agreement you need. Do you need a simple buy-and-resell agreement that lasts a short time and covers a limited set of products and territories? Is either of you going to use the other's intellectual property for further development? That calls for a more involved and longer lasting arrangement that deals with IP rights, including have-made and derivative product rights, as well as potential geographical restrictions.
Joint development deals call for even more thought on ownership of and rights to use the resulting IP and products over time. Sometimes it is best to proceed in a series of phases, proving value and using each phase to learn how to execute the next one.
4. Develop and work the critical relationships. Find the people within a parter company who stand to benefit from what you have and who are the most motivated to actually deliver what you need. This is probably not the business development folks, but the operating or sales executive whose business unit is affected. They are in the best position to understand what you really bring to the table and what the value is to their company.
5. Put it in writing. This is really important, especially when you are dealing with a big company. And make sure you include contingencies for when things go wrong. There is an old saying in the biz-dev world: "Plan for success, but allow for failure".
Finally -- do not put your business on hold while you work the deal. If it falls through, you can still live to fight another day.
