Partnerships

As the owner or manager of a small or medium-sized small business, you may sometimes feel as if you are working in isolation. The market seems increasingly competitive; money is tight; and your days are busy. It’s hard to set aside time to network, much less develop strategic alliances with other businesses. However, business alliances have been proven to strengthen companies and lead to their growth. Many companies are using this strategy to access a larger slice of their target market and also provide their customers with a wider range of complementary resources.

Whether you call it a partnership, an alliance or collaboration, this kind of arrangement can be described as a mutual agreement where participants work together to advance their common interests. Instead of spending time trying to beat their competition, business owners are embracing a more visionary approach that assumes that “the whole is greater than the sum of its parts.” It is a great strategy that combines the resources, talents, ideas and goals of more than one business in a plan for mutual success.  If you are a small business, it is well worth taking the time to explore this strategic path.

A partnership can be a formal or informal arrangement depending on the participants and their level of mutual trust. Formal partnerships have agreements that are enforceable by civil law and usually require a signed “Articles of Partnership.” These partnerships may even involve multiple ownerships with different lines of authority and roles. Informal arrangements may simply involve a memorandum of understanding between the parties. These informal, collaborative partnerships generally provide complementary services or products in order to reach out to and service more customers and are especially popular among small businesses. 
For instance, a small company that publishes books may establish a collaborative arrangement with a marketing company and an illustrator. Rather than hiring a marketing expert and an artist to his or her staff, the publisher uses these partners to increase the quality and range of services for his customers and also have increased access to potential customers.

There are also “competitive” business collaborations where two companies offering similar products or services agree not to establish a presence in locations where their partner is already present. Whether it is formal or informal, collaborative or competive, partnerships offer the opportunity to operate on a higher level than each company can do on its own. If you are considering a business collaboration or partnership, there are five important points to keep in mind.

---Make sure that all parties have a common understanding of the objective and vision so that expectations are clear and everyone has a specific role. Write everything down. Develop a simple and clear contract or memorandum of understanding. No question should be left unaddressed. 
---Once you are in a partnership, remember that collaborative thinking is the key to success. You are no longer thinking and planning in isolation. Make room in your mind for new approaches and new ways of conducting business. Embrace change. Keep the collaborative vision a daily focus. 
---Communicate freely and often with your partners. Be open and flexible. Establish a trusting relationship. Remember that each partner has different skills to bring to the table that should be utilized and celebrated.
---Find a partner that you genuinely like as a person. You will find that there is a lot of positive energy that comes from working with someone you like. Nurture this energy! And don’t forget to have fun!
---Attend conferences; join associations; be an active member in your community. The wider your network, the more likely it will be that you will find other small businesses that will be the perfect complement to yours.

Unfortunately, not all collaborative efforts are successful. In some cases, collaborations are started with the best intentions, but will fizzle out. Each partner needs to contribute something substantial that benefits the partnership. If one partner does not do his or her share or does not live up to expectations, the relationship will become dysfunctional, productivity will be compromised, and the collaboration will not be sustainable. This is why it is so important to work with someone who shares your personal values and work ethic. As awkward as it may feel, never hesitate to dissolve a collaboration that is not living up to the shared vision.

In the end, whether it is in a depressed or thriving economy, creating and leveraging relationships is a critical element in business growth.

"Coming together is a beginning, staying together is progress, and working together is success."
            -Henry Ford