Expanding through Strategic Partnerships — How to Structure the Deal
Do you have a business in DuPage County and are considering entering into a strategic partnership? Or are you thinking about forming a startup company in the Oakbrook Terrace area and wondering how you can have a mutually beneficial relationship with another small business or company? Strategic partnerships are agreements between two companies that are not in competition with one another, and they are agreements that benefit both companies. If you are looking to grow your company, strategic partnerships can help in a number of ways — from issues surrounding marketing to supply chains to technology.
Strategic partnerships are one way that you can expand, and it is important to learn more about strategic partnerships and, ultimately, how you should structure the deal.
Small Businesses and Strategic Partnership Agreements
The way you structure your strategic partnership agreement will depend upon the type of business you operate, and the way in which you want to expand your company. One of the more common types of strategic partnership agreements are marketing partnerships. Strategic marketing partnerships are especially useful for smaller businesses that offer a limited number of products and/or services. By partnering with a marketing company, you can work with a company that will refer others to your products and services, while the marketing company will also gain sales for your services or product by developing company-specific marketing techniques. The two companies, then, can share in the profits. In strategic marketing partnerships, it is important to work with a company that can market your products either to a shared customer based, or to a new set of consumers.
Strategic supply chain partnerships are also common among small businesses in DuPage County. These types of strategic partnerships allow smaller companies to work together to lower costs and to improve the quality of each of their products or services. With strategic supply chain partnerships, multiple companies usually work together with each creating a single product or service that saves on costs but keeps quality high.
There are many different kinds of strategic partnership agreements that you can discuss with your DuPage County business lawyer.
How You Should Structure Your Strategic Partnership Agreement
Now that you know a little bit more about strategic partnerships and how they can benefit small business owners in Oakbrook Terrace and throughout DuPage County, it is important to learn more about what should go into your agreement. The following elements should go into a strong strategic partnership agreement:
- Specific information about each business’s financial commitments and accountability for the products and services being provided (when strategic partnership agreements are vague, it can be difficult to enforce them);
- Clear definitions of the marketing programs that will be used to market the service(s) or product(s);
- Clear expectations concerning training requirements when it comes to getting the product out to customers, including “requirements for the sales, operations, and customer service teams”;
- Development of a timeframe for strategic partnership goals;
- Clear definitions of how each business defines success, and the ways in which the success of the partnership and the products or services produced will be assessed; and
- Agreement on communication between the businesses throughout the strategic partnership.
Contact a Business Lawyer in DuPage County
At Farooqi & Husain Law Office, we often work with small business owners in the Muslim community of DuPage County who are seeking out new ways to expand their companies. An experienced Oakbrook Terrace business law attorney can assist you. Contact us today to learn more about the services we provide.