It makes sense that the business decisions with the biggest potential payoffs also have the biggest potential for failure. Effective business collaborations with the right strategic partner and the right practices can be invigorating, bringing both inspiration and positive cash flow into your company.
But if things go wrong, the consequences can be dire. Fortunately, I've lived through some collaborations and I have practical strategies that can help you get your partnership started off right.
1. Articulate your goals.
The most common business collaboration fails I've seen have been a result of partners with misaligned goals.
Let's say you and your partner are launching a smartphone app. You need to be in agreement with what the app is supposed to do. If you're busily coding away on an app that's going to track the family's grocery shopping and send alerts when products are running low or nearing their expiration dates, that's great…unless your partner is out touting the app's efficacy at tabulating the nutritional value of every meal you input into the app. And if you're spending your working capital on a slick marketing campaign while your strategic partner envisions a grassroots, slow rollout, there may be a rocky road ahead.
...If you choose your strategic partner carefully and ensure your goals, responsibilities and communications are handled smoothly, you're giving yourself the best possible chance at fantastic success.
Before you start charging up those business credit cards, make sure you and your partner are on the same page in terms of what you want to achieve. It's possible for business collaborations to work if you and your partner have different goals as long as everyone's clear about the plan. You could be looking to expand your customer base to include your partner's clients. Your partner might be after your expertise in creating new proprietary technology. Clarity in terms of your collaborative goals is vital.
2. Delineate responsibilities.
Another common cause for failed business collaborations is one partner who feels like they're bearing more of the burden, whether it's financial or labor. Be as clear as possible at the outset to establish who bears which responsibilities.
Maybe you're the brilliant creative genius. That may mean you're working your tail off before your sales-focused partner gets to work to launch the product you're jointly putting out.
If matters surrounding cash flow and small business loans aren't covered up front, you might run into a situation where one partner feels like they don't do anything but sign checks with little to show for it.
Establish a clear plan and make it plain who's responsible for which tasks. You don't want to get to your launch date and hear “Oh, I thought you were handling that."
3. Facilitate communication.
This may sound like a ridiculously simple point, but trust me…I've seen some spectacular fails that were all rooted in communication problems.
First, especially if you and your partner don't work in the same location, make sure that you establish how often you expect to communicate. Whether you do weekly email updates or coffee every few days is completely up to you, but you want to manage expectations. If you're content to be working hard with everything going smoothly and only check in when there's a decision to be made or a problem to resolve, you need to make sure you don't have a partner who's fuming or fretting about the project status.
Second, make sure that you and your partner's technology is compatible—especially particularly if you're both coming from two different companies or industries. If your business collaborations rely on sharing documents or spreadsheets, then you'd better make sure there's no problem with docs that display gobbledygook because you're using two incompatible apps. Don't make your job harder than it has to be by fiddling with formatting problems. Get your tech game on the same page for the smoothest collaboration possible.
And lastly, just like any other business enterprise, getting your financials in order at the same time you get your goals and tasks sorted out makes sense. Consider establishing how you're going to finance your venture, whether it's with a small business loan or a business credit card.
Business collaborations can be brilliant, but they can also lead to disaster. (Typically, it's somewhere in between.) But if you choose your strategic partner carefully and ensure your goals, responsibilities and communications are handled smoothly, you're giving yourself the best possible chance at fantastic success.
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