Collaborating & Partnering With Other Businesses

Partnering with other businesses to pursue common goals is growing in popularity as a smart way to increase capability, share resources, reduce costs and mitigate risks. The internet, subcontracting and access to talent from around the world has made this even easier.

Partnering with other businesses can be formal (a contractual obligation), informal (referring work to each other and verbal agreements), significant (sharing suppliers and long-term customers) or ad hoc (coming together project by project).

The collaboration opportunity

Working with other businesses helps you share the responsibility of providing resources or support if needed. It also provides you with colleagues who you can work with, rely on and trust in the event of an emergency or just general day-to-day questions.

Here are some ways that collaborating with other businesses can benefit you:

Access to new product/service lines by selling another company’s products/services, saving you research and development costs

• Access to new markets where the partner sells or distributes your products and services to their customers

• Block competition by referring business to one another

• Reduce costs by sharing resources or staff or gaining volume purchase discounts

• Enhance capacity to bid on larger contracts by being able to offer broader, more comprehensive services

• Strengthen customer relationships by being able to better serve their needs

• Strengthen supplier relationships by bulk ordering

• Outsource production

• License the intellectual property of a partner to use in your business or vice versa

• Access to new business models and ways of selling

Making the best use of available skills

A collaborative environment makes a range of disciplines accessible on an as-needed basis, which leads to the efficient use of employee talent in a way that isn’t possible otherwise.

Collaboration allows multiple individuals to participate in the completion of a task, making it more likely that the right talent is available at the right time. With collaboration, tasks are completed more efficiently, leaving more time for staff to concentrate on activities that contribute to company growth.

Collaboration also allows a business to:

• Dedicate specialized resources to a problem, which may mean a solution is identified more quickly and more cost-effectively than would be possible otherwise.

• Share resources such as equipment or assets that may only be needed for a short-term project.

• Maximize organizational potential by allowing employees with different skills to leverage individual knowledge, strengths and capabilities.

• Build industry-specific knowledge.

• Create learning opportunities.

Finding the right partner

Take care to identify which type of business (and person) would be the ideal alliance. Thoroughly research and evaluate all potential partners and seek out companies that share your business ethic, strategy and expectations of working together. Formalize any collaboration with a clear written agreement that spells out roles and responsibilities, such as who looks after the customer relationship, how profit is shared and who owns what (especially intellectual property).

Collaborating works best when each party feels they’re getting a synergistic benefit and are able to achieve an outcome that isn't possible on their own.

Decide if collaborating will work for your business, identify what outcomes you’re after, find those businesses that match and then make contact.