A strategic partnership or collaboration can be an extremely successful way to grow and showcase your business. These types of partnerships allow each business to collaborate and contribute their own unique strengths to a joint project. When considering such a relationship, entering into a written agreement is the most prudent method of proceeding. Below are some important issues for businesses to consider when forming strategic partnerships and collaborations. Careful consideration of these and other factors, and crafting an agreement between the entities setting out the rights and responsibilities is key.
- Define the relationship – What products or services are we going to make?
- Term – How long are we going to work together?
- Financials – How will we share expense and profit?
- Intellectual Property and Other Rights – Who owns the work product created together? Who owns the rights to business opportunities created during the partnership?
- Employees – How are each company’s employees going to be utilized? How do I prevent the other business from hiring my employees?
- Exit Strategy – How do I terminate the partnership if it’s not working?