The following is an excerpt from the guide Accelerating your international growth through strategic partnerships, available now in the International Growth Collection, built in partnership with Export Development Canada.
Even before COVID-19, working with partners was an effective way to test markets at a lower cost and reduced risk. When identifying a potential partner, you should look at all the benefits of the partnership—essentially, what you both bring to the table—and consider what risks may be present.
The process of vetting and selecting a partner is critical to ensuring your investment in time and resources is worthwhile. Be mindful that this applies to both sides of the partnership. Your potential partner has all of the same concerns as you.
To start, identify your international partnership goals:
The art of vetting a partner lies in asking the right questions
|When vetting a partner, consider the following:
|When vetting you, your potential partner will consider the following:
|1. Where do you fit in your partner’s overall strategy?
2. Where will your business have buy-in with the partner organization?
3. Are they realistically able to deliver what you need them to bring to the table?
4. What is the partner’s scale and/or reach?
5. Are their benefits from this partnership significant enough?
6. What is their true motivation for getting into this partnership?
7. How do they compare to their competitors? (Consider market share, reputation, and ability to execute and influence.)
8. What are the deal terms? (Consider margin %.)
9. How long have they been in the market and how long are they going to survive?
|1. Will your business still be around in the future?
2. What is your credibility?
3. How dedicated are you to the market?
a. Are you a serious investment or an experiment?
4. What’s your market ranking in your home market?
5. Any local penetration and/or local product–market fit?
6. How do you fit into their growth goals?
7. What’s in it for them to work with you?
8. What other partners in the market are they considering and how are you a better partner?
In light of COVID-19, it is also key for both firms to consider asking what the churn rate has been for their employees and whether there have been any layoffs.
When vetting a prospective partner, conducting effective due diligence is a mandatory step before deciding to move further. This includes doing online research, talking to references and using a third party.
Access more resources on this topic in our full guide: Accelerating Your International Growth Through Strategic Partnerships.
This guide compiles the frameworks and insights you need to build your partnerships strategy and approach partner vetting with confidence. Case studies featuring the experience and learnings from Canadian entrepreneurs are also featured in this guide.
Create a free account for the International Growth Collection to access this and many other resources to help you build your growth strategy.
Built in partnership with Export Development Canada.