Why Form a Business Partnership?

There comes a time in a business’s lifespan when founders start considering partnerships. Partnering up with a venture capital firm or a private investor can bring many benefits. One of the biggest ones is the injection of cash flow into the company. This increase in capital could help spur marketing efforts and expand a brand’s product and/or service offering. But there are many other reasons why business partnerships can make sense. Here are a few of them.

You Don’t Feel Like Running Your Business Alone Anymore

Running a micro business can be done on your own, but things become trickier once you start to grow. Maybe you started small, added a few employees, and are feeling overwhelmed by the weight of your responsibilities. Some people will also experience entrepreneurial fatigue at some point even if their business didn’t expand.

In this case, welcoming a partner or multiple ones so you can divide the load could be a good option. However, if you decide to bring in multiple partners, partner relationship management will become very important.

You have to make sure that everyone is pulling their weight and that the weight they pull is proportional to their investment in the company. So if partner relationship management isn’t something you understand yet, this resource might help: https://www.workspan.com/guide-to-partner-relationship-management-prm/. You’ll get a much better idea of how to build strong partner relationships and tools that will allow you to foster better collaboration between partners.

Gain from Someone Else’s Expertise

Another benefit of entering a partnership is that you’ll get the chance to benefit from the expertise of the partner or partners that you bring in.

If you know everything about your sector but you’re bad with sales or simply don’t understand how to manage and monitor a sales team properly, you can always welcome someone who’s an expert at it. If you lack overall management skills or are self-taught as an entrepreneur, welcoming in someone who has a formal formation could be a good decision. You could even allow them to get majority control.

You shouldn’t be afraid to let someone else take the reins if you believe they can make your business grow. Someone with a real understanding of business will be able to improve things like sales, overhead costs, human resources management, asset allocation, and manage expansions, for instance. They will also be better at identifying merger opportunities or could help with things like franchising among others, so don’t be hellbent on keeping control as it could ultimately be detrimental to your business.

Benefit from their Network

This part is often overlooked, but, when you partner up with someone, you also get access to their network. If they have a special relationship with suppliers in your industry, for instance, or have a privileged relationship with investment bankers, then you could automatically benefit from them.

These are all reasons why business partnerships can work. If you are thinking of bringing a partner in, make sure that you check what they have to offer beyond the money and extract as much value from your partnership as you can.