Picking the wrong business partners can be worse than a bad marriage! So choose wisely.
How many times have you heard of partners going their separate ways and their business falling apart? Probably too often. Bad business relationships are very common and can be painful, financially and emotionally.
There are no guarantees that picking your business partners or strategic partners will work regardless of the method you use. But there is a way to reduce the risks using the criteria below.
Who Are Your Business Partners?
When you think of partners, do you think of someone that you're directly in business with or do you think of any strategic partner that is involved with you providing your product or service to your customers. Hopefully it's the latter. Outsourcing companies, vendors, supplies, recruiters, etc. are all strategic partners that help you deliver your product or services so they should be included in this category.
Three Simple Things To Look For
Here are three categories to review when picking your partners.
1. Values – Align your business with others who have similar values. Values create the culture of your business and the common saying is that "culture eats strategy for breakfast". The more aligned you are with your partners, the easier it is to make strategic decisions and execute on your strategy. You want to do business with others who believe in similar ways of doing business otherwise it can become a total nightmare.
For example, if your strategic partners are aligned with providing the best experience to all customers, it is easier to do so. But if one organization in your value chain is more about cost cutting and less about the experience, it can negatively impact the overall experience for your customers.
2. Performance – Align yourself with high-performers. When you work with high-performers, there are less risks involved. High-performers get the job done and done right. Low performers might be cheaper but it will cost you more in the end. One screw-up could cost you significant business.
There are times when you may not be able to afford to do business with high-performers and have to settle. In this instance, ensure that you have a back-up plan in case something falls through the cracks.
3. Interdependence – Do business with others who are dependent on you. Why? Because you want them to be vested in your success and you want to be vested in theirs. Interdependent relationships are longer lasting because there are common interests involved. You have the ability to influence their strategic roadmap which in turn gives you the ability to get what you need.
Picking the right business partners can be tough but when you use the above criteria, you have better chances of success. In addition, always check references. Past history is a good sign of future performance.
Purdeep Sangha – Founder, Sangha International
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