Alliances are a great business-building tool. Joining with someone else, be they in your own field or in a related field, to pursue business opportunities allows you to go after projects of size or complexity that you could never go after on your own.
In other words, forming an alliance with someone with experience that is similar to or complements your own opens doors that would not otherwise be open to you.
For example, as a public relations consultant, I often joined with graphic designers or web designers to bid for the business that required both of our services. Also, knowing that potential clients are sometimes reluctant to hire a one-person PR firm, I often partnered with another freelance public relations consultant.
We presented ourselves as a team, using my company name. This allayed any fears business owners had about whether one person could really handle all their needs or would always be available to them in an emergency. With two of us on the job, they felt reassured that they had a fallback position if something unforeseen happened to one of us.
In addition, alliance partners will often refer clients to one another if they hear of a good opportunity that they can’t take advantage of because their own plate is currently overflowing. I’ve had several alliances in which we refer business to each other regularly, with the understanding that the person who makes the referral would receive a commission if their ally gets the business.
For example, I used to work with a web designer who would receive a 10% commission on web copywriting assignments she referred to me.
But It’s Not Always Smooth Sailing
Before you launch into an alliance, however, it’s critical to acknowledge that things can go wrong with such relationships.
Entering into an alliance with the wrong person can even put your business in danger as that person’s poor reputation rubs off on your business.
Even if the other person doesn’t do anything that might harm your business, you can still waste valuable time and resources if you don’t take the appropriate steps in advance to make sure you each have a clear understanding of what you hope to gain by pursuing business together. If your goals don’t align, the alliance may end up being more trouble than it’s worth.
Making Alliances Work
My personal experience with alliances has been 95% positive. In fact, two of my alliances – one with a graphic designer and one with a fellow PR consultant – have lasted for several decades. At the same time, I’ve seen many colleagues and clients enter into alliances only to be deeply disappointed with the results.
Take the example of one of my long-time friends who is a copywriter in Austin, Texas. She shares her story of an alliance gone horribly wrong in my book, The Self-Employment Survival Guide.
My friend and her ally, who she had known for years, entered the relationship without being clear about each other’s expectations and the result was a disaster, especially for my friend because she lost existing freelance clients while she worked on building the alliance.
How can you reap the business-building benefits of alliances and decrease the potential for things going awry?
Here Are 4 Tips on How to Get Your Alliance Right from the Beginning:
1. Learn How the Other Person Conducts Business and Treats Clients
The tendency when talk turns to form an alliance is to focus on how well your service offerings match up with those of the other person.
But what you really need to consider first is whether you have the same attitude toward how to conduct business and how to treat clients and customers, you’re in for a world of trouble. In other words, do you share key values?
One of the first topics you and your possible ally need to discuss are your goals for your respective businesses. Listen carefully to how the other person talks about their clients.
Do they seem to value their clients and enjoy working with them or do they say negative things about them?
Do they seem to put the interests of their clients first and to be committed to delivering the best work possible?
Do they take budget and deadlines seriously?
Or do you get the sense that they try to nickel and dime their clients or tend to ignore deadlines?
If the business values, habits and attitudes of a potential alliance partner don’t match yours, this is not a person with whom you want to align your business. Listen carefully to what your intuition tells you about this potential ally.
If you ignore potential red flags, you’re going to face an endless series of arguments and may even end up harming your business reputation if people begin to associate you with the negligent attitudes and bad service provided by your ally.
2. Find out as Much as You Can About the Clients of Your Potential Partner
One of the things I enjoy most about freelancing is the freedom to choose my own clients. Depending on how close an alliance you form, you may be giving away some of this freedom by pursuing business from someone your ally chooses.
Also, if you’re going to be working with the existing clients of a new ally (and not just going after new clients together), you want to make sure you’ll be comfortable with these clients. If your potential ally has any dubious characters on their client list, you’ll certainly want to know about this in advance.
Here’s a personal example of why I raise this issue. I made it a practice to do internet searches on the clients that alliance partners referred to me. In one memorable example, an ally referred me to someone who wanted help in writing a business book; a two-minute internet search revealed that this would-be client was a convicted felon who had served time for chicanery in his former business – in other words, not someone anyone should be taking business advice from!
Shockingly, I soon learned that my ally knew this man’s history, but didn’t think it was important enough to inform me about it in advance.
When I brought up his history of larceny, she still would not concede that I should have concerns about working with him or that perhaps he wasn’t a good person to be giving business advice to others via a book!
Clearly, our values were not a match.
3. Start with Small Steps
Dipping your toe in the water with a small joint project instead of going headlong into announcing to the world that you’re entering a major alliance is the best way to go. This gives both of you a chance to see how the other works with clients and to judge whether their skill level matches what they claim to have.
If you identify problems, you can either figure out a way to address those or bow out of the alliance. This will save you the embarrassment of having announced an alliance only to have to acknowledge shortly thereafter that it didn’t work out.
Alas, not everyone takes this advice. I had a management consultant-client who announced to all of her clients that she was taking on a new partner only to have that person leave within a few months because it quickly became clear their work styles were not a good match. Better to start out very quietly with no big announcement than to have an alliance blow up in public like this.
Also, keep in mind that many alliances never have to be announced at all. It just depends on how closely you plan to work together. An alliance can be anything from working on a couple of projects together each year to forming a legal partnership in which you share the business. Many alliances start off slow and build over time to the point where it makes sense to formally unite the businesses.
4. Put Key Points in Writing
This should not need to be said, but, alas, from my observations of others, it is advice that is frequently ignored, to everyone’s later regret.
Going through the exercise of putting in writing the key points of an alliance is very helpful.
While you may not be forming a legal partnership, you still will benefit from putting down the key points, especially those related to money and responsibilities. And, of course, if you are forming a legal partnership, then make sure you have all your paperwork ducks in order on that front before moving forward.
The potential benefits of alliances are many, but so are the possible pitfalls. Never jump into an alliance without careful consideration.
Done well, an alliance can be a real boon to your business. But if not done well, an alliance can be a huge waste of time and may even mar your reputation and damage your business.
So make sure you get it right!