Identify the right partners
Small businesses need to pursue partnerships with companies that not only serve a similar audience, but also share the same goals. For instance, be sure to ask yourself how working together could be mutually beneficial to both companies. Furthermore, both companies should allocate a similar amount of resources.
Don’t overlook smaller companies
Many entrepreneurs salivate over the idea of being able to partner with a large company. While it can certainly help with building credibility as well as access to a significant distribution channel, there are drawbacks. Many large companies have specific guidelines to follow when evaluating a potential partnership. Large companies by nature are also slow when it comes to incorporating changes into their procedures and business model. It’s very important to understand that a partner could alter the trajectory of an entrepreneur’s vision if the scope and objectives aren’t discussed in detail prior to signing an agreement. Even then, a large partner can still alter your course.
Is there a system in place to measure performance?
Many partnerships fail before they even get started. It’s important to outline the goals from the beginning, the strategy to achieve those goals, and then the ways to measure performance. In addition, estimate the cost and future revenue impact to the financial model. If it doesn’t make sense, consider walking away.
When will the deal be finalized?
Most partnerships will take longer than you think as many large companies move slowly. There will likely be an introductory call, then a demonstration or meeting, then followup calls, and finally meetings with the higher ups. Even after the terms of the partnership become clear, you’ll still need to go through legal to finalize all of the terms in writing.
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