Going for growth means learning to spot emerging opportunities and taking advantage of them quickly - before your competitors move in.
But expansion requires people, skills, experience, equipment, plant, technology, and above all capital. Gathering all these quickly to take advantage of a fleeting opportunity is often beyond the scope of smaller businesses. By the time they have mustered the necessary resources the opportunity has passed, or a competitor with more clout has beaten them to market. Sometimes the solution is to seek a strategic alliance or joint venture with another business with which you have appropriate synergy.
The first stage is to determine:
Once you are able to profile the prospective partner, look for candidates among your customers or clients, among your suppliers, and in industry association sources. You can also ask your banker, solicitor, and of course us to make suggestions.
Draw up a short-list and then research each candidate carefully. Besides checking what resources they can bring into the partnership, look also at such things as their ethics, values, and expectations to see if there is compatibility in these areas. Check their accounts, history, and reputation. Ask their customers, suppliers, etc what it is like doing business with them. Once you have found a suitable partner and agreed heads of terms, draw up an agreement that clearly specifies:
Be sure to protect your interests by agreeing rules for such things as sharing data, poaching staff, disclosing financial information, and protecting assets such as intellectual property.
This process can require specialist knowledge, and above all, due diligence, and professional help is strongly recommended when considering such a venture.
We have a great deal of experience in helping clients grow through strategic alliances. Why not give us a call to see how we can help you?