Joint ventures can yield tremendous results. They can also be a huge pain. Here's how we learned to master certain rules of engagement, and make great partnerships.
Partnerships, alliances, joint ventures: whatever the arrangement, businesses believe working together can lead to results that they would have a hard time achieving on their own. This can ring especially true for small businesses partnering with larger businesses.
Seven years into working on my business, I can say without hesitation that past and present partnerships have been integral to Heritage Link's success. Working with household names such as American Airlines, Fair Trade USA, and the House of Mandela, among others, has strengthened sales, expanded our distribution and brand recognition, and helped us to hone our mission.
But in full disclosure, certain partnerships resulted in unnecessary headaches. In our haste to gain national distribution and "catch up to the big boys," we occasionally selected the wrong organization, or worked with the perfect organization—in a less-than-perfect way.
Since hindsight is 20/20, here are a few nuggets of partnership wisdom that I hope prove useful, especially for those developing your first partnership strategy:
- Know your worth.
When done right, smaller enterprises can move to the next level by working with a larger company that is already a household name. Larger companies, government agencies, and nonprofits offer more technological, marketing, and other administrative resources. However, it can be dangerous to assume that bigger always means better. Just because you are working with an organization with a budget that dwarfs your own, doesn't mean you bring nothing to the table. Smaller companies typically offer an authenticity, nimbleness, and innovation that big companies envy. That said, it's really important to be intimately aware of your strengths, too—not just your weaknesses.
- To friend, or not to friend?
If you're like me, you have begun questioning exactly how a good chunk of your Facebook "friends" are considered friends, if not more just tangentially related to your network. It's likely that your circle includes some people that don't really make sense. Similarly, it is a good idea to inventory your traditional business relationships and see if you can quickly answer why you are (or would be) working with each organization you're considering partnering with. Sometimes organizations start working together with high hopes, but continue long after neither have seen any fruitful results—simply because they have not considered parting ways, or don't know of a polite way to do so. This is not to suggest that you throw the baby out with the bathwater: if a relationship is not working, oftentimes you just need to recalibrate it, not end it. But evaluating the purpose and productivity of current and potential work together is key.
- Start small, but think big.
As you consider entering a working relationship with another group, keep in mind that starting off with a short-term project focused on completing a specific task might be more appropriate than beginning with a longer term commitment—especially if this is the first time your organizations are working together. Both parties should take advantage of the opportunity to test drive the partnership. Another tip: try not to discount short-term projects. When executed correctly, sometimes the shortest ventures have the deepest impact. If you are lucky enough to forge a lasting partnership, it will have been done thoughtfully. Terms such as partnership and joint venture are thrown around all too loosely, in my opinion. Beyond generally overstating the nature of the relationship, many such words have legal definitions ("Partner" with a big "P," vs. "partner" with a little "p"), or at a minimum, industry expectations, attached to them. Better to start small and grow accordingly.
Working with strategic partners is now a cornerstone of our business model, and mastering these rules of engagement has helped us tremendously.
Weekly wine tip: There's nothing sweeter than being in a joint venture where you can chart the success both sides bring to the table. In tribute to that moment, I recommend the sweet cakes Sweet White Wine, which I found at my local Whole Foods.