The hardest part about growing your business isn’t finding new clients; it’s finding the resources to deliver services. At Growth Path, we frequently recommend that clients choose strategic alliances over formal employees. This can take the risk out of rapid expansion of services.

A strategic alliance is like an associate; they add a certain skill or service to round out your offering, but don’t technically work for your company. For example, our clients often require corporate communications support. We could hire a corporate communications expert at a hefty salary (no thank you), but instead I bring in John Hotson of Clearwater Communications.

We excel at the strategic marketing side (think: product development & delivery), whereas John is an expert at getting the message out. We present a united team to our clients, yet we operate under our own companies. Ultimately the client gets the services they need, courtesy of an expert, and I don’t have to invest in new senior staff. Sound attractive? It is!

Working with a strategic alliance makes sense provided you’ve structured the relationship correctly. Below are a few best practices (each one learnt the hard way!) to guide your strategic alliance.

Who to partner with:

  1. Partner with a contractor who provides a companion service your clients need. If you have to find new clients to support your new alliance, it’s not a good fit.
  2. Partner with experts at a service you’ve dabbled in. For example, at Growth Path we know a lot about websites, but we keep a roster of external web experts on speed dial.
  3. Never partner with a company that provides the same services or you could risk eating each others’ lunch. And a side note: Dysfunction or competition between you and your partner will reflect badly on your business.
  4. Partner with a company the same size as yours or smaller. Go with a larger company and the reporting structure alone could bog you down. 

How to structure the relationship.

  1. Don’t over think it! People tend to over-structure an alliance. This is a mistake because, until you’ve really worked with someone, you don’t know them. Best to keep it fluid because it will change as you get to know your alliance better. The structure will naturally tighten up over time.
  2. Agree to regular ‘state of the union’ meetings. Prioritize them. This lets you to deal with issues at once and apply structure as needed. People who don’t review are the ones that get upset when an alliance isn’t working as they’d hoped.
  3. Make sure you’re on the same page in terms of sales goals and strategy. For example, you may be willing to sell the farm hoping for a larger piece of business over time, but your strategic alliance may not. I recommend quarterly sales reviews to make sure you’re on the same page about pricing, strategies and the big question: Should we continue working together?
  4. Never go exclusive. This is a big one because oftentimes your clients will have providers in mind. Your ignoring an exclusivity clause at the behest of your client will upset everybody. State your intent to work with your alliance as much as possible, but make sure they understand that occasionally you’ll have to go outside the relationship. 

Next time: How to present your shiny new strategic alliance to your favourite clients.

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