Business partnerships offer many entrepreneurs a way to expand their market reach, increase revenue growth and reduce risks. But not every relationship works out successfully.
Conflict can arise around money issues such as compensation, equity arrangements and timelines for realizing profits. Being clear about these areas upfront is one way to prevent future disagreements.
1. Know What You Want
No matter your business goals – whether that means increasing brand recognition or finding ways to work more efficiently – collaboration with other businesses may help achieve them more easily and reach more customers. But finding suitable collaborators may take some time and effort.
By joining forces with a partner, you can leverage their expertise and experience within the industry. A good collaboration can make you even more appealing to current customer bases while helping reach corporate objectives.
When selecting a partner, it is essential to take their personality and work style into consideration. Your ideal match should complement your strengths while filling any gaps that you might have. Furthermore, it’s also crucial that both parties know how they plan to communicate during collaboration – it would be ideal to agree upon an effective communication method like email or telephone so as not to delay initiating conversations about joining forces.
2. Reach Out
Collaborations among businesses can range from casual one-off projects to formalized joint ventures with joint goals in mind. Whatever the nature of the collaboration may be, both parties should be clear about what the project entails and who is accountable for certain elements.
As the first step of finding collaborative opportunities, reach out to others in your network. From influencers and subject matter experts within or beyond your company to other brands in your industry – make a list of potential collaborators and contact them as soon as possible.
Keep in mind that these are busy people, with lots on their plate; be respectful and patient if they do not respond immediately. Perhaps they have started on a new project, or maybe the pandemic has reduced hours at work for them – keeping communication open is important so let them know you look forward to hearing back from them soon.
3. Ask for Referrals
Start requesting referrals by identifying your most delighted customers through NPS surveys, customer service interactions or by analyzing their behavior in your marketing channels. Delighted clients will likely talk more positively about your services and have connections who could benefit from your products or services.
Rather, focus on providing superior service so they can continue advocating for you without feeling pressured to advocate.
Partnership with businesses offering complementary services is one way to generate more referrals, creating packages from both companies’ offerings and disseminating it to your client base. Ideally, this should also lead to cross-promotions and mutual referrals between both entities.
4. Follow Up
Contacting potential partners after initial meetings can be challenging, but it’s vital that you do. Doing so will keep the relationship alive and may open up future collaboration opportunities.
Partnering up can help you to tackle projects that would otherwise be too big for one person alone, pool financial resources and make accessing capital and lenders simpler, share in both its success or failure more evenly, and share in any lessons learned along the way.
Partnerships may have their drawbacks. One such drawback is being considered a legal entity along with your partner and being legally responsible for any debts or lawsuits that come your way if something goes wrong with either business. A written Partnership Agreement can reduce this risk by outlining duties, responsibilities and business management expectations as well as investments and liabilities that must be assumed jointly.