Alliances and Your Bottom Line

May 23, 2019


While a successful alliance can add 17% or more to your bottom line, alliances between businesses are not only useful for increasing sales.

Six areas of your business can engage in and benefit from strategic alliances:

  • Sales
  • Marketing
  • Operations
  • Finance/Funding
  • Administration/Infrastructure
  • Books and Records Management

For an alliance to be successful, all parties must agree upon goals in these areas.

Some business owners assume alliances are too complex to plan and manage and, often, they’re not wrong. Over 60% of all alliances fail. For an alliance to be successful, all parties must be willing to invest time, energy and often money, into making it work.

However, many businesses already have at least one alliance — even if they don’t use the term or put much focus or effort into it. What business wouldn’t want a referral or recommendation from a customer — especially from another business? This is an example of an alliance at its most basic because there’s an element of reciprocity. I write a recommendation for you; you write one for me. I give you a referral; you give one to me. This is also the basis of good networking, “give and take,” another kind of alliance that I discuss in my ebook, The Networker’s Guide to Success.

More formal alliances require a higher level of commitment and usually involve some sort of written agreement — which may or may not take the form of a contract. If a business has an affiliate program or offers co-op advertising dollars or Sales Performance Incentive Fund Formulas (SPIFFs), they increase the complexity of their alliance and boost all parties’ expectations. For example, a business may want affiliates to provide links or ask its staff to demonstrate, advertise, display, or market a specific product or service to its customers and prospects without bias. This constitutes an alliance because affiliates are rewarded for their efforts.

When a business wants to accomplish larger strategic goals that require access to expertise (NASA and SpaceX, for example) or additional “warm bodies” or “boots on the ground,” the alliance becomes more complex. Now, it can use a sales channel, distributor/partnership, or some kind of joint effort without co-mingling funds. Businesses often work together to provide different parts of a bundled contract because they can’t do it all themselves, or because they are required to or rewarded if they use subcontractors. All of these are types of alliances.

The ultimate alliance is joining forces and sharing risks by setting up a joint venture. Each puts money, staff, and management into the mix and they share the rewards as well as the losses.

But, is an alliance right for you? Stop and consider the alliances your business already has and whether or not they contribute to your bottom line. If not, could they? Do you need to change or add to these relationships to make them more powerful?

To accomplish your goals, both parties must be willing to put in the work, and everyone involved must have the desire for a successful alliance and the willingness to do what is necessary to make it successful.

Here’s to your success!

Topics: Business Operations, business management

Jan Triplett

Business Success Center

Jan Triplett, Ph.D. is the CEO of the Business Success Center (BSC), a City of Austin certified green business, that provides sales and financial growth strategies, planning, and implementation. She is also a professor in Business and Professional Skills for the online MBA program at Mary Baldwin University. Triplett is a national and international speaker, author of A Networker’s Guide to Success and co-author of Thinking Big, Staying Small and Easy to be Green. She published The Networker ” magazine for over ten years and moderated KUT radio’s nationally syndicated program, “The Next 200 Years”. She was co-creator of the award-winning “City Management Academy” and the “Owners MBA” and co-founded the Entrepreneurs’ Association Hatchery incubator and accelerator. She is a small business activist. She served as a White House Conference on Small Business and Congressional Summit delegate, served on the Mayor’s Task Force on International Infrastructure, initiated the Northcross IBIZ District and recommended portions of Austin’s Big Box Ordinance. She was a founder of the Women’s Chamber of Commerce of Texas and the Greater Austin International Coalition. The SBA honored her as Texas’ Small Business Advocate. She has also earned her CBTAC and Director credentials. Her company received a Small Business Administration (SBA) five-star national award and the Austin Business Journal named it a top 20 management consulting firm.
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