For a business to succeed, you may need to look to partnerships in order to grow. You may want to offer another service to your customers, or another business might want to offer your services to their customers because it’s not a core competency of theirs. Either way, stars need to align, customers need to be happy and both parties need to take it seriously if any partnership is going to succeed.
But what happens when a partnership fails? You never enter into a partnership with this in mind, but it could happen and there are myriad reasons why things don’t work out. So keep your eyes wide open for a few red flags that might make a partnership go off the rails.
1. Mismanagement of Expectations. When you go into a partnership with another party, set your expectations for what success will look like upfront. This way, if you or your partner starts to see that the number of sales isn’t up to snuff, or the number of new customers you thought you’d drive is looking low, you can reassess and make necessary changes.
2. Teams Change. I can’t tell you how many partnerships we’ve done in my 11 years at VerticalResponse where, over time, you feel like you’re re-introducing yourselves and your teams to each other because of turnover. Make sure you keep in contact with your partners on a regular basis. Weekly check-ins or reports work really well to make sure you’re both top of mind with each other; plus, you might find that you’ve got ideas to make it even better.
3. Company Direction Changes. Keep tabs on what’s going on with your partner and their company by subscribing to their blog and getting a feed of their press releases. Keeping up to date on what’s happening with their business prepares you for any sudden changes that may occur.
4. No Skin in the Game. Does your partner need what you offer to succeed or vice versa? With partnerships, you generally want both parties to get something out of the deal. So if you put your money where both of your mouths are, chances of success are much greater. You may want to put a monthly sales minimum out there so that if your partner’s customer(s) aren’t going to generate enough sales, they should pay you a minimum. This way, they’ll be thinking more about how to make the partnership a success.
Partnerships can really work, but they have to be cared for. One more thing: Having a contract in place is a great idea. This way, if the partnership doesn’t work out for any reason, you or your partner can point to a piece of paper and call it quits. Have an “out” clause that says you can get out of the partnership if explicit expectations are not met. Neither of you want to be part of a partnership that isn’t working out; after all, time is money and cutting your loss and moving on might be just what you need.