Teamwork provides the basis of all successful companies. Efficient business partnerships at the top level can make any company flourish. Partnerships help a business grow in three different ways:
- They offer the necessary investment the business owner cannot raise themselves.
- Partnerships offer various types of talent required to run the business.
- Entrepreneurs cannot take care of all aspects of business by themselves.
- Partnering with the right people for marketing, outsourcing, and administration helps them save enormous effort and time.
- Partnerships open up the business owner’s mind to new possibilities, ideas, and business trends in the market.
There are different kinds of partnerships and each one comes with its own advantages and disadvantages.
The most common partnership deal made in a business is regarding investment. One partner invests money in the working partner’s business and gets a share in profits as a silent owner.
Apart from this, there are various types of mergers and acquisitions where the clientele of each company is shared to benefit each other.
For example, consider the partnership between Spotify and Uber. It enabled the customers to listen to their own personal playlists while driving a taxi.
Likewise, Spotify got more streaming time and ad revenue while several of its customers willingly chose Uber instead of other taxi services. The strategic alliance between both companies created a win-win situation for all.
Partnerships between eBay and PayPal as well as PayPal and Apple Pay ended quite soon, becoming an example of failed partnerships.
PayPal was providing its financial tech service to both companies. But their cost and charges were not acceptable to the mother companies who felt their merchant companies will benefit more from smaller companies who charge less.
Failure to negotiate proper terms and conditions created lots of commotion among the merchants or end-users who struggled to use eBay’s new payment platform Adyen.
Similarly, importer contract terms prevented PayPal from providing services to Samsung, Apple’s rival company which made them terminate the much-anticipated partnership.
Growing Your Business with Partnerships
It is important to consider what you want in a partnership prior to finalizing any deal.
The business owners should understand some part of their freedom is compromised when they make a partnership as they have to fulfill the demands of their partners too.
Partnerships help in tackling competition in a better way by providing more investment to grow the business. Extra talented hands to run the business.
It is more effective to handle the competition with a bunch of expert brains than with one single person’s passion.
Not all partnerships run smoothly and good conflict resolution skills are necessary to maintain profitable partnerships for a long time.
The skills will help the entrepreneurs tackle various business-related issues with expertise too.
Ask the Right Questions
Be clear on your goals and ask the right questions when it comes to choosing partners.
Be clear on how much investment you want, what you cannot compromise like a marketing budget or administration freedom, or product quality.
List out the points you are open to accepting changes to like outsourcing, training staff, promotion and distribution channels, etc.
Effective communication is the key to making your partners understand your business goals.
Select only partners who are compatible with your long-term vision and never make hasty conclusions when it comes to selecting investment partners.
Clearly determine their limit and power in the company beforehand to avoid numerous conflicts later as with PayPal and Apple Pay case. Business growth is possible only with the collaboration of partners, and one person dominating the other will not lead to success in such endeavors.
Top 5 Strategies to Grow Your Business Through Partners
- Use the reputation of their firm and their loyal customer base to sell your products.
- Make extensive use of the partner’s resources like money, talent, office space, and other amenities to grow your business.
- Check other partnerships in the market or how your particular partner has helped other companies grow and extract the best from them.
- Whether it is promotion or production, set common goals and work towards them in a transparent way. Do not let the partner feel left out while making major decisions.
- Explain to the partner the entire business structure even if they stick only to certain expert areas like management. It will help them increase their overall management skill set.
Growing a business with partnerships is easy if you get hold of authentic partners.
Check with your clients and study your competitors to find out who your potential partners are and target them. Approach them in person, not through other people, to get the best deals. Try to negotiate with them, explain your goals to them and make them an indispensable part of your business.
If someone you’ve never heard of is offering to partner with you and you’re interested in what they have to say, check them on Nuwber. That will help you see if they haven’t lied about who they are and what they can bring to your business.
When it comes to money and companies, it’s better to stay on the safe side and not trust people blindly.
Partnering for a Societal Cause
Corporate social responsibility or CSR is gaining prominence these days. It’s wise to partner with a good charity or NGO to showcase your company’s good deeds.
It will help your customers feel proud and bring in more customers to your business automatically. Popularly known as partnering for social good, these types of partnerships benefit both those in need and the company and improve the brand image of the company.
Such partnerships can be between two companies joining together to help a charity or one company partnering directly with the charity to help in all its events.
Either way, such partnerships benefit several parties at a time. As a result, they have become an important part of CSR in the modern world.
Business partnerships are easy to create. But they will lead to lots of issues if the partners are not chosen properly.
Select your partners wisely based on your compatibility level and your future business vision. Likewise, it is important to negotiate and work on conflict resolution to make any partnership work successfully.
Leverage the advantages of your partner to increase your customer base and create more profits. Similarly, ask the right questions when you choose your partner. Finally, be ready to compromise on certain aspects to make your partnership successful.