Imagine: You’re standing at a computer terminal in the basement of the County Clerk’s Office. Wondering if you’ve fallen into your own version of a Direct TV ad. Your hands are shaking a little as you listen to the unusually loud clack-clack-clack of the outdated keyboard as you type in the name of a strategic business partner. The fluorescent lights create a sickly glare on the screen. You impatiently wait for the search results. You start to feel gloomy. Is it the yellow-green chipped paint on the walls? The smell of musty, moldy volumes of business records? The smell of something … else …? Or the cold sweat that’s creeping through your body?
The computer stops whirring. You look at the results. Your heart sinks. Your stomach starts to gnaw. Their company name is there under “Defendant.” Why? “Unpaid debt.”
“No-o-o-o!” you wail (on the inside). “Not them! Not now!” You just had an RFP accepted with a major supplier diversity program. Your strategic partner is an important part of the mix. But ever since getting the thumbs-up, they’ve been flaking out. Not showing up to meetings. Making payments late.
A nightmare story? Actually, a nightmare reality.
Strategic alliances can be a great growth strategy. (See my article, Top 10 Questions for Forming Strategic Alliances). You tap into new trends in collaboration. Expand into new markets. Provide extra value to current clients. Give your company leverage so that you’re not doing all of the heavy lifting on your own all of the time.
But where many business owners fall short, is in asking the deeper questions. Taking the more formal steps.
I recently led a session on “Quantum Strategic Alliances” at the Enterprising Women annual awards conference. After the gala (and a few cocktails), several multi-million dollar women business owners confidentially shared their top “lessons learned” when it came to these kinds of partnerships:
- Ask for financial proof. If money is going to change hands, dig deeper. Ask for financial statements. Do credit checks. So often, small business owners are uncomfortable asking for financial proof … as if somehow, it makes them overly-nosy. Or not trusting. In the U.S., at least, this is part of the culture of business. And due diligence. So trust … but verify.
- Beware the rush. The adrenalized excitement. Where you’re flying high, these women told me, you’re not aware of what’s going on on the ground. That’s where you trip yourself up. And “rush” in the sense of “we have 48 hours to put this deal together.” Because two things happen. (1) You don’t evaluate. Sure, the dollar signs are tempting. But is this really the right deal at the right time for your company? (2) You don’t get on the same page … literally. You’re so busy scrambling to get the client contract, you don’t lay out your partner contract. Or consider the expectations for your alliance partner. Or theirs for you. Or for the project.
And that’s when you can end up in ugly places, like the County Clerk’s basement office.
What are your “lessons learned” about strategic partners? Post your wisdom below!