Partnerships are commonplace in nearly every industry. People and businesses often enter into mutually beneficially relationships.
These partnerships or collaborations are often created so that businesses can take advantage of each others' resources, manpower, or consumer base.
But, how do you know if the partnership is going to be beneficial for both parties?
Businesses and entrepreneurs should never plan on a collaboration that doesn’t offer any advantages. If only one side can benefit, then there is definitely a problem with the idea.
That’s why we typically ask the same two questions every time a partnership opportunity arises. We want to know how much the project will cost and we want to know what’s in it for our business.
Those are good questions to start with, but they don’t really help you make an informed decision. You need to dig a little deeper.
Before entering into an agreement, there are certain details that need to be explored. Here are 7 questions that you need to ask yourself before agreeing to a partnership.
#1 – Do I Need a Partner?
The first question is to determine whether you need a partner. There is a difference between needing a partner and wanting a partnership.
Answering this question can help you plan out the details of the partnership. If you need a partnership in order to grow your business or stay afloat, then additional importance is placed on the project.
But, if you don’t need a partner at this point in your career or business, then there needs to be extra incentive to enter into a partnership.
#2 – Does This Project Align with My Current Goals?
Make sure that the project aligns with your goals and objectives. If the project takes your business in an unplanned direction, you may have trouble getting back to your main goals.
The project that you work on should be a part of the bigger picture. If the proposed collaboration doesn’t help you work towards this goal, then it may not be in your best interest.
#3 – What Are the Risks Involved in this Partnership?
You always need to examine the risks of any decision. Consider the risks involved in taking on a partner. This may require you to learn more about the other party.
What do you really know about this partner?
Learn more about their reputation, track record, and their individual goals or focus. Their reputation could be a risk. Find out what others in your industry think about your partner.
You need to be prepared for any risks. At the same time, you should prepare to share in the success of the project. Remember that you’re not the only person benefiting from the project.
#4 – Who Gets the Final Say in the Decision-Making Process?
Determine who gets the final say. You should know upfront who has ultimate control over the project. When it comes to these details, you may need to get your legal team involved. You need to know the scope of the project.
Your responsibilities need to be clearly defined and outlined. Any detail related to the logistics of the project needs to be hammered out before an agreement is reached.
Everyone needs to be on the same page when it comes to the amount of participation each party needs to contribute and when it comes to who’s in charge.
#5 – Is the Other Party Committed to This Partnership?
You shouldn’t get involved in a partnership if the other party doesn’t seem as motivated or excited about the opportunity as you are. You want to ensure that they are just as committed to making this project a success.
The length of the project could be a factor. If the planned collaboration lasts for a long period of time, enthusiasm can wane. You want to judge their level of motivation to see the entire project through.
You should also determine what happens if one party backs out of the partnership midway. Determine the responsibilities for quitting and what sort of compensation the other party will need to cover.
#6 – What Does the Other Party Gain?
You also need to ask yourself what the other party stands to gain from this partnership. Obviously, you want to know what’s in it for you. But, you also want to know their motives.
Are they entering into this partnership to take advantage of something that you have to offer? The answer should be yes. You need to identify their motives to determine what you’re bringing to the table.
#7 – What Will Happen with My Existing Market Base?
One of the final questions to ask yourself is what will happen to your existing market base. Actually, there are several questions that you can lump together.
How will this collaboration impact your customer’s image of your business? Will the partnership upset any of your customers? Will it hurt your reputation within your existing market?
Explore the effects of the project on your target audience and whether it will hurt or help your situation in the future.
Partnerships can be incredibly useful in helping you reach new markets, explore new areas of business, or improve the quality of your products or services. But, these types of decisions should not be taken lightly.
Before you decide to partner with another business or individual, you need to examine every detail of the plan. Use these questions as a foundation upon which you can make an informed decision.
Ask yourself if you really need a partner right now. Determine if the partnership fits your goals and objectives. Figure out who is in charge of the project and learn more about the other party.
If the answers to these questions satisfy your needs, then the partnership may be worthwhile. If you’re not happy with the answers, then now might not be the right time.
Partnerships establish connections between two or more businesses. Your reputation is tied to the other party.
You need to do your research, ask yourself these questions, and then weigh out the advantages and disadvantages. Don’t rush into bed with just any partner.
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