Now that you have considered all the different types of business alliances and have gone through all the necessary attributes that you need to have in order to enjoy a successful partnership and have chosen a potential partner, you need to sit across from each other and try to lay down the foundation for an effective relationship. An effective relationship should consist of both trust and benefits. By benefits here we mean the potential of growth for your companies as well as the revenue that it will bring in. In a company that has publicly traded stocks, you need to also consider the effect that this alliance will have on your stockholders. Try to place yourself in their shoes and decide what kind of benefits t you can offer them out of this alliance.
Keeping in mind the length of this relationship, whether it is long term or short term, you need to consider the security issues involved. If your partnership is only short term, for just one product or service, you may not want to disclose all your information to your partner, especially if they are a competitor. They may be able to use this information in the future to their advantage and expand their market share while shrinking yours. To protect yourself, have short term partners sign a non-disclosure agreement. If the relationship if long term, you both need to come clean. Nothing should be hidden from each other, such as secret projects and hidden assets. You should know as much about each other’s company as you know about your own. A long-term partnership is like a marriage. In order for it to be successful, both partners have to be completely honest with each other.
That brings us to trust. One of the most important parts of an alliance is the trust that you have in each other. You can’t go to the general public with a new product if partnering companies don’t have trust in each other. This is especially true in a partnership where you both manufacture different pieces of a product and then present it as one. A good example of this would be a car. You might make the engine, while your partner manufactures the rest of the parts and assembles them. When the product goes to the public, if it has a bad engine, it’s your fault, but the name of the product as a whole is charred. Having trust in each other might stop this catastrophe before it happens. You can go to your partner with the bad engine and ask his help in developing a better one. Remember by being honest with each other, you save yourself and your partner a lot of money.
So how is trust developed between two partnering companies? The best way to go about it is by setting small goals for each other to achieve. If you feel the partner has successfully reached those goals, the partner’s success will help the two companies build bridges. Always try to pick partners that mirror your intentions the closest about the future of your company.
