The Power of Partnering in Small Business
Partnering with other businesses can be formal (a contractual obligation), informal (referring work to each other and verbal agreements), significant (sharing suppliers and long-term customers) or ad hoc (coming together project by project).
The Collaboration OpportunityCollaborating with another business not only divides responsibilities but also cultivates a network of reliable and trustworthy colleagues, fostering a mutually beneficial relationship. In the event of a crisis that temporarily halts your operations, knowing you’ve got back-up with other businesses can reassure customers you won’t let them down.
Collaborating can help you:
- Access new product/service lines by on-selling another company’s products, saving you any research and development costs.
- Access new markets by the partner on-selling your products and services to their customers or distribution channels.
- Develop new product knowledge by tapping into new ways of production.
- Block competition by referring business to each business exclusively.
- Reduce costs by sharing resources, staff or gaining volume purchase discounts.
- Enhance capacity to bid on larger contracts by being able to offer wider services, or present as a much larger business with enhanced capability.
- Strengthen customer relationships by being able to better serve their needs.
- Strengthen supplier relationships by bulk ordering.
- Outsource production.
- License the intellectual property of a partner to use in your business, or you license your intellectual property to them.
- Speed up technology transfer.
- Access new business models and ways of selling.
Making the Best Use of Available SkillsA collaborative environment makes a range of skills accessible on an as-needed basis, which leads to the efficient use of employee talent in a way that isn't possible otherwise.
Collaboration is a collective effort, bringing multiple individuals together to complete tasks. This strategy makes it more likely that the right talent is available at the right time. With collaboration, tasks are completed more efficiently, leaving more time for the staff to concentrate on activities that fuel company growth and expansion.
Collaboration also allows a business to:
- Throw the most skilled resources at a problem, which may mean a solution is identified more quickly and more cost-effectively than might be possible otherwise.
- Share resources across businesses to save investing in equipment or assets that may only be needed for a short-term project.
- Gives access to employees with very different skills to leverage individual knowledge, strengths and capabilities and maximizes organizational potential.
- Builds company knowledge.
- Creates a learning opportunity.
Finding the Right PartnerExercise diligence when identifying which type of business (and person) would be the ideal alliance. It’s important to thoroughly research and evaluate all potential partners. Seek out companies that share your business ethics, strategy, and expectations of working together. Formalize any collaboration with a detailed written agreement outlining roles and responsibilities – who owns customer relations, profit distribution, intellectual property, and task assignments.
Collaboration works best when both parties reap synergetic benefits and can achieve outcomes otherwise out of reach on their own. Decide if collaborating will work for your business, identify your goals, pinpoint compatible partners, and initiate contact.