How small businesses use strategic partnerships to promote growth

As a small business owner, you want to do everything you can to help your business succeed. But in the early days of entrepreneurship, time and money are often in short supply.

This is why you might consider establishing a strategic partnership with another company. Strategic partnership is one of the best ways to integrate your resources to achieve future growth. It can help you reach a wider audience and access tools and resources you wouldn’t otherwise have.

But what is a strategic partnership, and how can establishing a strategic partnership help your business develop? This is exactly what this article will explain.

What is a strategic business partnership?

In a strategic partnership, the two companies agreed to share resources to achieve further growth and mutual success. For example, you might work with another company in your industry to enter a new target market.

Strategic partnerships are good for companies of all sizes, but very helpful for small businesses. This is because strategic partnerships can be a key growth strategy that allows you to compete with larger companies.

What are the three types of strategic partnerships?

• Joint venture: In a joint venture, the two companies combine their resources to accomplish a specific goal. Each company is responsible for the costs and profits from the joint venture. However, they are still two separate business entities.
• Equity strategic alliance: In an equity strategic alliance, one company buys the equity of another company. Or sometimes, both companies will buy equity in the other company.
• Non-equity strategic alliance: In a non-equity strategic alliance, two or more companies sign contracts to integrate their resources. But they will not create separate entities or share any equity.

What is a good strategic partnership?

Just as you spend time thinking about your ideal customer, it’s also a good idea to spend some time thinking about your ideal business partnership.

One of the most important things to look for is that both companies can provide each other with something of unique value. If this relationship is too one-sided, it is unlikely to work in the long term.

Generally speaking, it is a good idea to work with a company that is not your direct competitor. A good strategic partner will add value to your customers without directly competing with your products or services.

Both companies need to be excited about the partnership. Similarly, if one company gets significantly higher value than another, then the partnership is likely to break.

How do you establish a strategic partnership?

Establishing a strategic partnership is a good way to expand the customer base, use additional resources and increase revenue. But you have to make sure to do it the right way.

Don’t rush for success

Whenever you want to establish a new strategic partnership, you must lay a solid foundation. This is especially important when every company has important financial interests in the partnership.

Take some time to discuss your company culture, communication styles and expectations. Don’t just assume that everyone involved is on the same page-take time to think about how you will interact and collaborate.

Doing so will give your partnership the best chance of success. It can help create a written vision of how you will collaborate and what you plan to accomplish.

Maintain strong communication

Even the strongest business relationship can be eroded by poor communication. One of the best ways to avoid this situation is to schedule regular meetings to discuss business. This will not only give your partnership the greatest chance of success, but it will also help you build trust between both parties.

Each enterprise brings different skills and resources. So if possible, try to get both parties to focus on what they do best. For example, one company may be good at sales marketing, while another company may be better at forecasting and budgeting.

Finally, invest in tools and processes that will help the two companies work together effectively. The right resources can help you bridge the occasional communication gap.

Take time to reassess

Relationships are constantly changing and developing, and strategic business partnerships are no exception. This is why it is a good idea to periodically reassess where you are and whether the partnership is still beneficial to both parties.

Are your priorities still aligned, and are the two companies still focused on the ultimate goal? These types of conversations may be uncomfortable, but in the long run, they will help you avoid bigger problems.