Strategic partnerships offer rewards — and risks — for health and wellness businesses. Here’s a quick self-help guide.
Strategic partnerships give you both access to customers and markets that would otherwise be difficult if not impossible to reach. For example, a connection between an employee wellness provider and a regional grocery chain to jointly offer a healthy eating program can clearly help both parties.
They’re not the same as the partnership form of business ownership. You don’t own part of their business; they don’t own part of yours. You may agree that money will change hands under certain conditions; or you may simply agree that you’ll each take certain actions.
Either way, it’s a relationship intended to make both of you more successful than you’d be individually.
When contemplating a strategic partnership, hope for the best — and plan for the worst. The odds are good that the relationship will run into bumps in the road at some point. Thinking about those potential glitches in advance helps you make sure that you and the partner you’re considering have shared values that will help you resolve problems constructively.
Consider these questions:
1. How will we each protect our business image and identity?
While you both have common interests, it’s still important to protect the image and identity of your own business.
For example, consider an agreement that requires your approval of joint marketing materials, including in-house promotional materials and radio and television advertising.
2. How will we make the relationship work?
Spell out what each of you will do to help ensure results for the other.
For example, you may promise to provide a written testimonial in exchange for placing your promotional materials in your partner’s store. Your partner may agree to offer weekly nutrition seminars in exchange for your allowing the use of office space in your store to conduct metabolic assessments.
3. How will we measure the success of the relationship?
It’s important to define up front what specific results you each expect.
For example, you may agree on goals for additional sales leads or revenues. Decide how – and how often – you’ll each report on the results. Many businesses overlook this step. However, you shouldn’t invest time in a relationship that doesn’t produce business results.
4. How will we handle a change in plans?
Consider agreeing to notify each other in advance of any significant business changes.
Examples include closing the business, opening or closing a branch, shifting business focus, perhaps even losing a key employee or customer.
5. How will we handle changes that we don’t control?
External influences always pop up unexpectedly.
For example, demographics change and your businesses don’t “fit” as well. Store traffic suddenly drops off because of road construction. Since it may not be possible to provide notice of events you can’t control, the termination provisions we discuss below may be helpful.
6. How will we end the relationship?
Perhaps your business direction changes, or hoped-for results don’t materialize. Agree upfront on a termination process that reduces business disruption.
For example, you may need time to develop an alternate source for sales leads. A notice period gives you time to make those changes. In lieu of notice, a termination fee may be an acceptable alternative.