In business, the line between competition and cooperation is blurring and companies are finding innovative ways to work together. Think of Intel and Windows' Wintel collaboration, for example. This can be a great opportunity to create synergy and foster business growth -- or it can be disastrous for one or both partners. The best relationships between formerly competitive entities -- business 'frenemies,' so to speak - are the result of careful planning and realistic expectations.

Make no mistake -- you are in business to make money, and so is every other company, including your prospective partners. Given that there is only a certain amount of money to be made, you want to make as much of it as possible.

There are two ways to make money in a given market: increase your slice of the pie or increase the size of the pie. By working with a competitor as a partner you may be able to increase the size of the pie. Increasing the size of your slice is up to you. These objectives aren't mutually exclusive, but you do need to consider them both.

Plan your collaboration

Plan out the partnership before you agree to it. Make sure both sides are in agreement about how the collaborative business will be managed and that this is spelled out in legal terms. Include a conflict resolution mechanism and a way to make changes to the scope of the agreement.

Going into the partnership realizing that it probably won't last forever is smart business sense. Consider it the business equivalent of a pre-nuptial agreement. It might not be romantic, but it's strategic.

Assign leadership roles

Having a designated person in each organization with responsibility for the partnership is a good strategy. That person should have complete responsibility for the collaboration and everything related to it should be approved by them. There may be others in the organization who have roles to play, of course, but the buck stops with one specific person.

Have an exit strategy

As companies grow and evolve, they often enter new markets or fill more needs in the ones they are already in. If one partner moves away from the space in which the collaboration was born or, worse, expands directly into the space occupied by the other partner, it can get ugly.

Partnering for specific projects is the best answer to this dilemma. If you can, arrange collaborations on a case-by-case basis. When the project ends, so does the collaboration. If you want to renew it for another project, that's easy enough to do. If this isn't an option based on your business model, give your partnership a shelf life of one year. At the end of that year, assess the situation and determine if it makes sense to continue for another year based on profitability, time invested, and more.

Partnering with another company to grow your business is smart, but don't forget what made you successful in the first place. Keep your eye on your core business and don't let the partnership overshadow it.