Value of Partnerships

Sometimes, small business growth moves faster when two or more entities draw together. Often labeled strategic alliances, these undertakings occur when two or more businesses enter into an agreement to work together toward a common goal while still remaining independent. This type of partnership enables you to go further as a team than either of you could go alone.

Why are partnerships so important?

Partnerships increase your base of knowledge, expertise, and resources available to make better products, reach broader audiences, reduce costs, and spread risks. An added benefit is the 360-degree feedback partnerships instill can fuel your business to grow. The right business partnership will also enhance the ethos of your firm.

How do strategic alliances create value?

Strategic alliances allow partners to scale quickly, build innovative solutions for their customers, enter new markets, and pool valuable expertise and resources. And in a business environment that values speed and innovation, this is a distinct competitive advantage.

Here are ways a strategic partnership can be a boon to your business.

• Access to new customers – you will widen your reach by being able to reach your partner’s clients.
• Opportunity to reach new markets – both partners have the ability to explore a new frontier and benefit.
• Added value for existing customers – a partnership adds value for your loyal customers; reaching customers during a growth period can further loyalty and perhaps foster positive word-of-mouth.
• Increase brand awareness – get out there and let people know who you are, be exposed to your logo and branding; create recognition.
• Build brand trust – when people see you create positive relationships with others, they will be more willing to help out and support your business.

While partnerships have significant upsides, business alliances are notoriously difficult to get right.  But, the effort is worth the added effort as the competitive advantages are key to success in our increasingly fluid economy.

A mutually beneficial strategic partnership can be forged when both parties have:

• skin in the game,
• a shared vision, and
• an all-in-this-together mindset.

What is also crucial is cultural alignment. Both parties must share:

• core values,
• transparent objectives, and
• a willingness to share data.

Both parties should be co-developing new customer propositions or business models through a shared ecosystem of service and product offerings. A strategic partnership should be both exciting and daunting.

However, in the past, strategic alliances have tended to flounder after the initial excitement and press release—cultural differences, conflicting priorities, and logistical hurdles can derail the best of intentions. Apparent infidelity and growing mistrust have caused several major corporate partnerships to unravel. In some cases, alliances have consumed a great deal of time and resources without producing much in the way of results.

These elements must be identified and addressed before the final agreement.  If they are left for the post-announcement stage, the partnership might never flourish.

If both parties understand the key elements of successful partnerships; have identified complementary goals; and have a willingness to share, joining together can positively spur growth.

Explore partnerships with care, act with discretion, and if you do act, jump in with both feet.

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