The Art and Opportunity of Building Strategic Alliances Presenter: Anita Campbell How to grow your business faster and save your sanity with business partnerships

Today’s Partnering Agenda What is a strategic alliance? Criteria for successful partnerships Who should you partner with? How to establish partner relationships 7 Good Reasons to Partner 3 reasons NOT to partner

What is a strategic alliance?

Criteria for successful partnerships

Who should you partner with?

How to establish partner relationships

7 Good Reasons to Partner

3 reasons NOT to partner

The Power of Partnerships In 1980, upstart Microsoft partnered with then-giant IBM. The Microsoft DOS operating system was distributed with IBM’s new personal computers. $53,000,000,000

What is a strategic alliance? Means many things to different people Can describe: Cross referrals Outsourcing to 3 rd parties Co-marketing Online affiliate arrangements “Business partnership” arrangements Joint venture companies Legal partnerships

Means many things to different people

Can describe:

Cross referrals

Outsourcing to 3 rd parties

Co-marketing

Online affiliate arrangements

“Business partnership” arrangements

Joint venture companies

Legal partnerships

Formal Tech Partner Programs

Definition: Business Partnership Today we will focus mainly on “Business Partnerships” Criteria: Each side brings something to the table the other doesn't have Each made strategic decision not to spend the time or money to do it alone, or can’t do it alone Together, you are better equipped to meet a market opportunity

Today we will focus mainly on “Business Partnerships”

Criteria:

Each side brings something to the table the other doesn't have

Each made strategic decision not to spend the time or money to do it alone, or can’t do it alone

Together, you are better equipped to meet a market opportunity

Do You Need A Partnership? ASSESS YOUR NEEDS Evaluate your situation – do a SWOT analysis if necessary Walk in your customer’s shoes What do they need? Versus what you offer Observe competitors If they are ahead, how do you catch up fast? Evaluate market opportunities Do you have everything you need to capture a market opportunity?

ASSESS YOUR NEEDS

Evaluate your situation – do a SWOT analysis if necessary

Walk in your customer’s shoes

What do they need? Versus what you offer

Observe competitors

If they are ahead, how do you catch up fast?

Evaluate market opportunities

Do you have everything you need to capture a market opportunity?

Do a Cost Benefit Analysis Evaluate partnering against not partnering Speed Focus Make vs buy Sometimes partnering is the ONLY option

Evaluate partnering against not partnering

Speed

Focus

Make vs buy

Sometimes partnering is the ONLY option

Do You … REALLY … Need A Partnership? 75% OF ALL PARTNERSHIPS AND ALLIANCES FAIL

75% OF ALL PARTNERSHIPS AND ALLIANCES FAIL

Establishing Partnerships - You Us Me YUM Method: Broach a partnership with another party in this order: You – what’s in it for the other party Us – what can we achieve together Me – what I get out of it comes last You Us Me

YUM Method: Broach a partnership with another party in this order:

You – what’s in it for the other party

Us – what can we achieve together

Me – what I get out of it comes last

PESD to A Partnership P = Paint a picture of the partnership opportunity and potential Example: “There is an opportunity for you to extend your reach into XYZ market by ….” E = Explain the mechanics of how you see it working Example: “If you can advance more inventory without requiring up-front terms, our company can accept more big orders. Require a 20 deposit, and allow the remainder to be paid out over time. In return we will ….”

P = Paint a picture of the partnership opportunity and potential

Example: “There is an opportunity for you to extend your reach into XYZ market by ….”

E = Explain the mechanics of how you see it working

Example: “If you can advance more inventory without requiring up-front terms, our company can accept more big orders. Require a 20 deposit, and allow the remainder to be paid out over time. In return we will ….”

PESD to A Partnership (cont’d) S = Sell the benefits Be prepared to demonstrate with hard numbers, such as “… this deal would double sales on your XYZ line.” Remember to focus on the benefits to them, not you. D = Document the relationship Partnerships may involve formal arrangements such as contracts, or in other cases something less formal. At the very least there should be an email or letter outlining the arrangement. Tip: document it fast. Deal momentum can die.

S = Sell the benefits

Be prepared to demonstrate with hard numbers, such as “… this deal would double sales on your XYZ line.” Remember to focus on the benefits to them, not you.

D = Document the relationship

Partnerships may involve formal arrangements such as contracts, or in other cases something less formal. At the very least there should be an email or letter outlining the arrangement.

Tip: document it fast. Deal momentum can die.

7 Good Reasons to Partner Partner with suppliers to finance the growth of your business Open up new markets Get access to valuable training and tools Establish credibility Strategically add specialty expertise Round out your product or service offering Meet governmental contracting requirements

Partner with suppliers to finance the growth of your business

Open up new markets

Get access to valuable training and tools

Establish credibility

Strategically add specialty expertise

Round out your product or service offering

Meet governmental contracting requirements

Be Choosy When Partnering -- Warren Buffett, the world’s second richest man, adapted from Blaise Pascal, 17 th century mathematician “ All man's miseries derive from not being able to sit quietly in a room alone.”

-- Warren Buffett, the world’s second richest man, adapted from Blaise Pascal, 17 th century mathematician

3 Warning Signs NOT to Partner No compelling goal : You don’t have a specific business goal to pursue jointly Use the “revenue measure” Vagueness : Your partnership is vague Small businesses don’t get much out of vague “marketing” partnerships – better off selling instead No Commitment : Your partner (or some faction within it) is not committed The “kiss of death”

No compelling goal : You don’t have a specific business goal to pursue jointly

Use the “revenue measure”

Vagueness : Your partnership is vague

Small businesses don’t get much out of vague “marketing” partnerships – better off selling instead

No Commitment : Your partner (or some faction within it) is not committed

The “kiss of death”

Anita Campbell [email_address] 330.242.1893 www.smallbiztrends.com Thank you! Credits: Slide # 9, various industry studies including Vantage Partners Slide #10, Kare Anderson, www.sayitbetter.com , as stated in a Small Business Trends Radio program © October 2006, Small Business Trends LLC

Anita Campbell

[email_address]

330.242.1893

www.smallbiztrends.com