Successful companies often pursue business expansion to attract more customers, enter new territories, and enhance their profitability. While some corporations pursue mergers and acquisitions, others migrate to foreign countries. But experts believe that one of the most practical methods of growing your business is building strategic partnerships with other companies.
You locate a business that complements yours to create affiliations for sharing your budget and accessing an untapped audience. These alliances help you to combine resources with another company to reach your business objectives while accelerating commercial progress. So, here are some factors to consider for a successful business partnership:
- Financial Management
Excellent companies pay keen interest in their financial management processes. It is one of the most critical factors that make a company stand out among its competitors. Risk management, financial stability, account profitability are some of the essential indicators of effective financial management. However, when choosing a business partner, it is always important to compare your target company’s evolution of income statement with other businesses operating in the same industry.
Another critical factor is the team’s skillset that ensures financial management of your and your partner’s company. Since both companies might need to collaborate for various financial meetings, it is good to check on the skills and expertise of your partner’s workforce. As financial management is the backbone of any company, business affiliations with skilled and educated professionals can take your business to new heights.
Many education institutions are now facilitating professionals by offering advanced education programs such as an online masters in accounting for non accounting majors to equip them with the necessary skills. These tech-savvy individuals can contribute to strategic decision-making in your company after collaboration.
- Business Values and Credibility
Alliances seldom work when the two partners don’t enjoy each other’s company and have different business values. Conversely, successful business collaboration relies on shared goals, a positive work environment, effective work management, and strong business ethics. Ask yourself, ‘Does it look like a natural fit?’ before partnering with someone. It doesn’t make any sense to collaborate with a company dissimilar to yours. The alliance between BMW and Louis Vuitton is one of the most prominent examples in this regard. Despite being in different industries, these two companies had one thing in common, i.e., they both marketed to wealthy people. A shared audience made them a natural fit for a business alliance.
Some experts have recommended partnering with your friends since business becomes more efficient when done with people or businesspersons you know already. Though navigating business partnerships with friends/family has its disadvantages too. So, we must also look at the following factors before collaborating.
Companies often partner with well-established brands with an excellent reputation to maintain their brand image. In other words, you should evaluate your partner’s public perception. Since you don’t wish to associate with brands that lack consumer trust, collaborating with well-liked brands or businesses always works in your favor. Just look at what BuzzFeed did. They partnered with the Best Friends Animal Society and made a video showing Emma Watson playing with some cute kittens.
- Commitment and Teamwork
You must look for like-minded individuals before allying. We would suggest you to work only with businesses that are committed to the plan and don’t treat this alliance as a mere side-gig. Avoid working with firms that put all the burden on your shoulders and show no genuine interest in sharing responsibilities. It would be best to collaborate with a company that understands its duties and is prepared to contribute wherever required. The commitment marks an essential feature of business partnerships that entrepreneurs initially neglect to take into account.
Teamwork is another crucial factor that results in the success of business affiliations. This teamwork is responsible for producing effective communication between the two companies. Companies invest in employees’ education to harness their potential and improve their critical skills. Thus, pursuing the master of business administration online degree allows workers to gain finance, marketing, and analytics expertise while being a part of the industry. After the collaboration, your team utilizes these skills to work with your business partner. If the other team doesn’t reciprocate the same willingness to contribute, the partnership won’t succeed. Since you two must act in liaison to benefit each other!
- Networking and Complimentary Skills
Your connection with the target audience perpetuates your survival in the industry. Partnerships are beneficial for your networking capabilities since they help extend your influence over the industry. So, before collaborating with someone, you must consider how broad their network is! Will you get access to more people without harming your existing customers’ interests? Of course, one of the primary aims behind business collaborations is to expand each other’s customer base.
We can see that Apple and Salesforce announced a strategic partnership in 2018. It allowed Apple to enter the CRM technology while Salesforce could make its tech more accessible to iOS users. That’s how a successful collaboration creates a win-win situation for you.
Nowadays, businesses look for people who have different but complementary skills since this difference makes affiliations more beneficial. When Uber partnered with Spotify, they used different but complementary skills to leverage each other’s audience. The partnership enabled Uber passengers to listen to their Spotify playlist during their rides. Such complementary skills ensure that partners don’t steal each other’s customers but benefit from their reputation to seek a quick business expansion.
It might sound strange, but most commercial alliances fail because businesspersons neglect to look for the right factors in such affiliations. In contrast, the right collaborations enable companies to expand by leveraging their connections in the industry. It prevents you from wasting your efforts and resources while inspiring you to become more efficient and productive. It further provides a win-win situation for you and your business partner and enables small businesses to survive and succeed in the long run.