Each day comes with myriad choices. Some will be small and inconsequential, while others will be large and quite difficult to make, potentially having a significant impact on the future of your business. Of all the choices that fall within the latter category, one of the biggest will often involve another party — and whether to partner with that other party. Perhaps teaming up with a distributor has the potential of expanding your market reach. Maybe you’ve been approached by a sales partner with a well-established client base. The possibility of improving sales is certainly an attractive proposition.
No matter the type of collaboration, partnerships can pay off — and the data appears to back this statement up. HubSpot’s 2022 “State of Partner Ops and Programs” report revealed that more than half of organizations surveyed could attribute 26% or more of their revenue to partners. But revenue is just one reason to explore the idea of partnering with other businesses. Expansion, knowledge sharing, and cultural improvements can also come from such an arrangement.
1. Partnerships help build the business and facilitate expansion.
Almost all businesses in the U.S. qualify as small businesses — 99.9% of them, to be exact. Of those, over 80% have no employees at all. They’re solo ventures. Another 16% conduct business with minimal staff, employing no more than 19 people. Operating with such limited resources (and often capital) can make it difficult to move into new markets, take on new customers, or improve sales cycles. So, it only stands to reason why strategic partnerships serve as catalysts for business growth and expansion. You can achieve more together than individually. Two heads are better than one, as they say.
Of course, partnering with a supplier, vendor, manufacturer, distributor, or simply another business isn’t something left to chance. It’s important to find one that complements your strengths — and offsets your weaknesses. It’s also advisable to find a partner with a shared vision of the future. Otherwise, you risk taking your business in a different direction than planned. Look for a partner that excels in those areas of the market or business where you might be struggling. Do the same with an alignment in your organization’s values, goals, and culture. And consider starting small at first to determine whether the partner is a good fit.
2. Partnerships enable knowledge sharing.
Knowledge and skills gaps are something almost all companies struggle with. In fact, 87% of companies worldwide report that they either already have a skills gap or will have one within a few years. Tapping into the years of experience of a strategic partner, whether that partner is a large corporation or a mom-and-pop shop down the street, can provide valuable insights into best practices, industry trends, and operational efficiencies for your operations. It’s akin to finding a professional mentor who’s seen it and done it all in your industry.
Besides, partnerships offer the opportunity to get a fresh set of eyes on a project, market, customer segment, or operations in general. This outside perspective can highlight potential improvements — that, or the pitfalls inherent in your plans. It’s just a matter of finding the right partner. Many of the same “rules” apply as those mentioned above, with the inclusion of a few key aspects. Come to an agreement on expectations for all parties and determine exactly what you hope to achieve during the partnership. Will it serve as a development opportunity for employees? Is it to fill a skills gap in your operations?
3. Partnerships foster a culture of technological advancement.
“In the technology industry, there is always the question of ‘build versus buy,’ or, in this case, partner,” explains Jon Cassell, COO at Rockbot, a multiproduct media platform that delivers enhanced in-location customer experiences. “Having the right partner is key. When you have that right partner, you can shift some of the weight in a certain area on them to bring continued innovation in their specialized area.” For Cassell, it’s always helped that his company operates with a partnership mindset. Each interaction is seen as an opportunity to collaborate and create synergies that can benefit both parties.
One of those benefits is cultural, helping to build a more dynamic, open, and connected culture both within an organization and as a part of the greater landscape and community. Cassell stresses the importance of being thoughtful about where you want to partner and where you want to build, as the partnerships you do bring in can allow you to double down your investments where it’s important for you to build internally. It also ensures that the partnership fosters a culture that enables high-value, open information and insight sharing, which, in turn, can drive breakthrough innovations.
Though the benefits of partnering with other businesses are many, companies can still be quite wary of entering into such an arrangement. Like anything in business, there is the potential that the partnership will fail. But that shouldn’t dissuade you from exploring the idea. It’s all about making the right choice in partnerships — and understanding exactly what you’re getting into before arriving at a deal. A little due diligence can go a long way to achieving the results that you hoped.
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