Monday, August 17, 2009

When Does A Partnership Makes Sense For Your Small Business?

Before attempting to form an alliance, whether it is a partnership or some other form, you need to make certain that you are familiar with the steps. Preparing in advance is like practicing the steps before your first dance. It will help you avoid possible costly mistakes, and perhaps stepping on someone's toes.

You need to answer the following key questions before you take that first dance step:

1. Do you truly need an alliance or do you have the expertise and resources required to succeed on your own?

2. What benefits do you expect from an alliance versus going it alone -- both financial and non-financial?

3. Who are the potential alliance associates?

4. What alternative forms of alliance have been considered and what is the best form for this alliance?

To answer these questions you will need to perform a thorough, objective and honest assessment of your company's business environment, the internal and external challenges it faces, AND its strengths and weaknesses. In other words you need to have a well thought out business plan.

Finally, what I have found over the years is that:

(1) the size of the commitment required to properly support an alliance is typically underestimated and ....

(2) weaknesses in the planning phase will show up later and will become very costly and cumbersome to rectify.

You can learn how to establish and manage solid and successful business alliances in Charles H. Newman’s dynamic business guide BEYOND THE CHICKEN DANCE.