No one does business in a vacuum, and many times it pays to work with others to promote business growth. Of course, this means hiring staff at the right time, but even more importantly it means partnering with other business owners in strategic partnerships. When you create partnerships to further business growth, both businesses benefit.
It’s important to choose your partnerships carefully. When you choose to work with another business, you are linking your company and reputation to the other organization. As a result, you want to carefully research the business practices of the other company before you agree to a strategic partnership. A poorly executed partnership can be a death knell for your company.
Important Considerations When Creating Partnerships
Besides doing your research, there are other important considerations to make when creating partnerships to further business growth. First, make sure you know what each company brings to the partnership. In a sales partnership, perhaps you both serve similar clientele, and you can offer a commission if they allow you to display and sell your products in their store. Or perhaps bundling your offerings together would give you both more customers. Regardless, each business should give and receive something.
Secondly, be sure to use a trial period. Even a partnership that looks good on paper may not work in practice. By having the initial arrangement for only six months, for instance, you give time for both partners to see how comfortable they are with the partnership and how much effect it has on your business growth.
Finally, make sure you have a written contract. A handshake is nice, but if things go sour, you want to make sure that your full partnership agreement is in writing. Make sure that the contract has an escape clause, a way to leave the agreement after the trial period, without harming the either business. The contract should also specify what’s involved in the partnership, any revenue sharing arrangements, and other important details.
Types of Partnerships That Benefit Business Growth
There are a variety of different partnerships that you can create to encourage business growth. Which one you choose depends on your business needs and the prospective partners you discover. Here are three ideas for specific partnerships:
- Sales Partnership. A sales partnership is a good opportunity to get your products in front of new prospective customers. Done well, it can significantly benefit your business growth. You want to find a business partner who serves similar clients, and who you are not in competition with for your product or service. Then you can agree on a commission to pay the other business owner in return for allowing you to sell at their location or on their website. A sales partnership can get a lot of new eyes on your product or service.
- Co-Branding Partnerships. A co-branding partnership allows you to offer a product or service in a bundle with the other business’ product or service. This encourages business growth by allowing your product to become more valuable because it’s offered in conjunction with other items, and it also allows both businesses to promote the offering to their audience. Co-branding partnerships can even involve a large number of businesses offering a group bundle at a single price, as long as the revenue sharing is clearly described in writing.
- True Partnership. A true partnership is when you work with another business owner to offer a unique product or service that you create together. Examples can include co-hosting an event, writing an online course together, or finding other ways where each of you contributes your unique strengths to an offering. When you work together to create something neither of you would have created alone, you can dramatically improve business growth on both sides.
Overall, creating partnerships are a great way to further your business growth. As long as you are careful to do your research, find the proper partner, use a trial period, and have a written contract, you should be in good shape regardless of what type of partnership you choose.
Business growth can be stimulated with a sales partnership, a co-branding partnership, or a true partnership. Regardless, creating a win-win situation can help your business for years to come.