5 Benefits of Business Partnerships
Originally Published: Dec 1, 2020
Success in business is not always about who your competitors are – it is also about who your strategic allies are and how you can form partnerships to your m10utual benefit. When two businesses work together, each can benefit greatly in a number of ways. Many large companies have long been aware of the advantages of partnering, and there are many examples of successful business partnerships.
A binding contract is not necessary, just an agreement that you are willing to work together, forming an alliance to help one another. Thinking creatively about who you can partner with and how that partnership will work, you will see that there are so many opportunities. For instance, if you’re a personal trainer you may want to consider partnering with a local health food shop or sports equipment store. Or a restaurant and local theatre, working together to provide a ‘night out’ offer for customers.
Here are just some of the ways that a strategic business partnership benefits and helps bolster both businesses:
Expand Customer Base
A strategic partnership means the other business will have access to your customer base – but you will also have the opportunity to reach theirs. Depending on how your partnership works, there are a number of ways you can agree to allow this access to customers. Offering referrals to your partner is one way to grant access. If the businesses are in the same realm, there is a good chance that your customers will be interested in and will benefit from the referral.
Expand Geographic Reach
If your business and your partner’s business are located in different cities, provinces or countries, you have the opportunity to reach an entirely new market without ever setting up a new location. Being an exclusive provider of products that may otherwise be difficult for customers to obtain can be highly beneficial to both businesses.
Access to New Products
Partnering with other businesses can also mean that you will have access to new products to offer your customers to enhance their overall experience. For instance, a snack food company may partner with a local craft brewery to create unique offerings that customers will benefit from. Business partners can work together to create product pairings to provide customers with added value, and lead to increased sales and brand awareness for both companies.
Boosting Reputation and Trust
Your partnership will reflect directly on your business, so choose your partner wisely so it reflects positively on your business. Partnering with a business with a bad reputation, poor customer service or other negative aspects will directly reflect on your business and your credibility. However, creating strong partnerships with trusted businesses can elevate your business’s reputation. Any customers your partners have already created a positive rapport with will see you as a trusted business if you are working together with a business they have already built a relationship with.
New Ideas
As a business owner, you likely have a lot of great ideas for problem solving, business development, marketing and so on. But, you are only one person and there different ideas and ways of doing things that you have not yet thought of. One benefit of strategic partnerships is having the ability to share information, ideas and advice to your mutual benefit. Creating this network of shared ideas and brain power can help open your eyes to new opportunities, creative solutions and new ways of doing things.
How you can start creating successful business partnerships
As you begin looking for good partners to match with, it is important to have a good understanding of what will be involved and what the goal of the partnership is. Even if you are a small startup looking to partner with larger companies, it is important to define what you want out of the collaboration for your business.
Knowing what you and your business can offer your partners can help bolster the proposal to potential partners. Whether it’s your expertise, creative ideas or products themselves, let your partners know what they will be getting when the businesses are paired together. Partnerships between small businesses allows each to help pool resources, which can be hugely beneficial for new startups.
If you are looking at creating partnerships with larger companies, it is a good idea to connect with one single person who you can contact directly and build a rapport with. You may find that it’s easier to establish your partnership with a large business when you have an ally helping you from the inside.
Any partnership you create may not be beneficial forever, as each business grows and possibly shifts in their focus for the future direction they are taking. It’s important to recognize when a partnership no longer works for those involved and either revamp how it is structured or part in agreement.
Get started by getting your own business registered or incorporated
Before a business partnership can be formed, the businesses themselves need to be registered or incorporated. Ontario Business Central can assist with either of these, however, it’s important to understand the differences between each before proceeding. There are a few advantages and disadvantages to registering and incorporating, so weighing these can help you decide which direction you want to take. You may also want to consider that corporations often have better access to financing and are generally more well recognized in Canada and abroad than a small business registration.
Once you have decided which is best for you, we can help you get your documents completed and the business registration or Articles of Incorporation to you right away, so you can start looking towards potential business partnerships.
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From small startups to large companies, business partnerships can be highly beneficial to both businesses involved, if they are structured properly and both parties are committed to a shared goal and a successful partnership.
At Ontario Business Central, our commitment is to assist entrepreneurs as they build and grow their successful businesses. If you have any questions about how to take the first steps to start, please reach out to our helpful and knowledgeable staff.
inquiries@ontariobusinesscentral.ca
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Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.
