Corporate partnerships: how to create winning synergies
Nowadays, starting a business means being able (and having to) rely on the strengths of others as well. Business partnerships make it possible, when needed, to fill a gap in the business model or to provide an additional service beyond what is already possible to one’s customers.
This argument applies even more to startups: for as Mark Zuckerberg teaches,
“the strength of a startup often lies in the quality of its partnerships: finding the right partner can mean the difference between success and failure.”
To avoid failure and achieve success, therefore, you need to know what a corporate partnership is, what benefits such a partnership offers, and how you can find your ideal corporate partners.
What is a corporate partnership?
In the business universe we often talk about corporate partnerships, and there are many definitions that try to explain what is really meant by these two words. It is now time for more clarity.
Definition and characteristics
A more formal definition of corporate partnership refers to integrated management of a process by two different parties, acting as if they were part of a single entity. In more concrete terms, however, a corporate partnership refers to a collaborative relationship between two or more companies for the purpose of obtaining one or more mutual benefits.
Types of partnerships: horizontal and vertical
Companies that decide to enter into a partnership agreement may belong to the same sphere but also operate in different sectors. Moreover, the companies may be on the same level or be on different levels of the value chain (and have different decision-making power as a result). In the latter case, this is referred to as a vertical partnership.
In contrast, horizontal partnership sees companies of the same level collaborating and deciding to make their expertise and customer segments available to the counterpart.
Benefits of partnerships for businesses
As we have already had the opportunity to point out, there are many benefits you can gain when you decide to enter into a partnership with your startup. After all, achieving (mutual) benefits is precisely the purpose behind a business partnership. This also means that the moment you realize that the agreement you enter into does not secure any benefits for your business, you must be ready to take a step back.
The next few lines will help you understand in more detail what benefits you might enjoy in the event that you decide to enter into a business-to-business collaboration agreement.
Expansion into new markets
One of the main benefits that a business partnership can offer you is the conquest of new markets that, without the partnership agreement, you would not have the opportunity to access (or that you could access in a more complicated way and/or by taking longer).
Brand enhancement and online reputation
You should know that, from a business-to-business agreement, your startup can also gain in terms of branding and online reputation. You might, for example, decide to partner with a nonprofit organization, so you can turn the spotlight on your business values.
Sharing resources and expertise
In a business partnership, companies pool their resources and expertise in the name of a joint project capable of securing mutual benefits. This means that your startup can acquire more resources without you needing to invest directly in acquiring new equipment or talent. Keep in mind, too, that collaboration can also involve sharing expenses for particular activities, such as marketing.
Innovation and growth
Another of the benefits you can aim for by partnering with other companies is growth from an innovation standpoint. Obviously, in order for this to be possible, you need to enter into agreements with larger companies and, where possible, companies that play a leading role in your industry.
Clear agreements: the key to success
Be very careful: forging a business partnership does not automatically result in a successful, win-win operation for all parties involved. In fact, unforeseen events are always just around the corner. The way to prevent and avoid them, however, is there. And you are about to find out.
The importance of the business-to-business collaboration agreement
The first piece of advice for you who are thinking of entering into a business-to-business agreement is to formalize such an agreement: you must, in fact, put in black and white, in detail, everything that the two parties expect from each other and what each is able to offer. It is also important to set realistic expectations, so that you can have a practically attainable goal and avoid facing an announced failure.
Partnership agreement: mistakes to avoid
When entering into a partnership agreement, you absolutely must avoid some mistakes that, unfortunately, are instead very common among startuppers and entrepreneurs.
First and foremost, do not accept the first offer: the benefit must be mutual, and it is therefore crucial to negotiate an agreement that really works out for all parties involved.
Don’t be tempted by the size of the company offering you a partnership: a large partner is not always also a great partner. Obviously, a large company is able to offer you greater opportunities, but maybe what it brings to the table is not what your startup needs.
When looking for a partner for your startup, likewise, you should not limit your search area: those who can help you find what you need are not necessarily located near you. In fact, they may be exactly on the other side of the world.
The management of disputes
Like contingencies, disputes are always just around the corner-the key is to be aware of them and know how to handle them. We have already emphasized the importance of formalizing the agreement in black and white, but it is equally important to maintain a constant dialogue with the other party so that timely action can be taken to remedy any problems.
Many people make the mistake of ignoring problems, hoping that they will turn on their own. We have news for you: problems almost never solve themselves. Talking to your partner and finding a quick solution together strengthens the relationship and prevents a small problem from becoming an insurmountable snag.
How to find the ideal corporate partner
If you want to find the right business partner, you should not rush or accept the first proposal that comes your way. On the contrary, you would do well to conduct a careful and thorough assessment. The selection of the ideal partner is based on some very specific assumptions.
Evaluation and selection
To choose the ideal partner for your startup, you need to start with what your business needs to grow and improve and what you are able to bring to the table as added value (both in terms of skills or resources and opportunities). It may help you to establish specific criteria that your business partner will need to meet, for example at the level of financial situation.
Once you have done this, you need to shift your focus to those potentially interested in entering into a partnership agreement with you: the choice, of course, must fall on an entity that can meet the requirements you set earlier. Remember, too, that for a successful partnership you must partner with companies whose products or services can complement your offerings.
Effective communication in business partnership
We repeat again: it is always best to put the partnership agreement in black and white, so that both parties are clear about what each party expects from the other. Remember, too, that it is equally important (indeed, crucial) to keep the relationship and communication between the parties alive, so that timely action can be taken in case of problems that could jeopardize the partnership.