What is the biggest advantage of forming an alliance?

Everyone has their own definition of an alliance. I had a potential alliance with a person that was starting his own business. He came to my residence with his partner and I brought in a couple of friends and business associates to discuss the possibilities. He gave us a fabulous demonstration of his company offerings. I really liked what he had to offer and was willing to pass leads on to him. He was excited about the possibilities. He next mentioned that he would love to work with our current client base. I asked how he saw the relationship working and his reply was that he would piggyback on our current sales effort. I then asked him how we would be able to capitalize on his client base and how he would help sell our services.

Guess what? He only wanted a one-way relationship: we would make money on sales we did for him! This would certainly take us away from our core business; take us into another area which might fit within our focus in some respects, but not entirely at all. Needless to say, this potential alliance did not get put on paper, even though his offerings were good. You see, an alliance has to be a two-way street. Each member must have a benefit to forming it.

In this example, the business presented would not be a good choice for an alliance. We needed to have a company that provided us with services we could offer in addition to our own services. The allied company would also have the opportunity to sell our services as an add-on. The important thing to remember is that you must carefully choose your alliances.