It is amusing sometimes to watch collaborative bedfellows split and reunite, like a couple going through a separation who finally realizes the ties that unite them were more important than what seemingly divided them. This can be true in the business world too, when those companies that took part in very public splits suddenly re-think the unraveling of a cooperative agreement and quietly crawl back. Case in point? Nike and Macy’s.
Very publicly, amid the pandemic, Nike decided that it didn’t need Macy’s stores to sell its shoes and athletic wear, believing, like many, that the pandemic was showcasing the death of brick-and-mortar. But this year, that short-lived breakup ended because Nike found, like many other companies, that not only has retail made a tremendous comeback, the price of obtaining customers online continues to skyrocket. So why not collaborate with Macy’s and, at the same time, step on arch-rival Adidas’ throat while they’re trying to unload Kanye’s shoes?
But partnerships are also advantageous to many businesses outside of the retail space. Companies of all sizes are finding the cost of operation, maintaining personnel, shipping, marketing and client acquisition as expensive today as any time in our history. So why not share the burden? There are many good and, yes, a few wrong reasons to seek out a partnership. But, for many companies stretched thin on the operational and revenue side, partnerships could be the elixir that could save or propel them to the next level. Here’s a list of some advantageous reasons to partner up from Business.com.
1. Sharing the workload
When you enter a business partnership with at least one other person, your workload may lessen, as there are additional people to help with the tasks. Splitting up the work and responsibilities may make your business more efficient.
2. Developing ideas and experience
In a partnership, you have others to fill in any knowledge or experience you may lack. For example, you may have extensive knowledge about marketing a product, and your partner may know how to speed up production to get the product to the consumer quicker. If you’re new to the business world, your partner could have a background in business they can use to help guide the partnership toward success.
3. Splitting the costs
If needed, you can split the cost of retail or office space, inventory, equipment and any employees’ salary. Sharing the financial burden can reduce some of the pressure you might feel if you were running a business alone.
4. Less paperwork
Running a business requires a variety of paperwork, including a trade name application, partnership authority and a partnership agreement form. If you have partners, you can handle the trade name application and your colleague can take the partnership authority form, for instance. The benefits of sharing the paperwork include having less paperwork to handle yourself, spending more time on other aspects of the business and having another person review your paperwork to ensure accuracy.
5. Pursuing more business opportunities
When you enter a partnership and split the workload, you have time to pursue more business opportunities. You can try seeking new opportunities such as:
- Examining your competition
- Researching industry trends
- Understanding your potential leads and their interests
But there are some potential negatives too, and companies need to think about competing cultures and other obstacles to the growth you’d expect. Those obstacles include an inability to weather disagreements, the cost of sharing revenue, an underperforming or lazy partner, or not having a concrete exit strategy.
But not unlike Macy’s and Nike, some of the best business partnerships are the ones no one considers or assumes would be the business equivalent of oil and water. For every partnership disaster like Shell Oil and Lego, Starbucks and Kraft or Daimler and Chrysler, there are great examples of collaborative partnerships like Nokia and Microsoft or Waymo and Fiat. Even Nike has found its relationship with Apple one of the best business decisions in its history.
If you’re a small, medium or large company owner, there are potential partnerships in every business conversation that could help build your brand or cut costs while increasing revenue. Don’t walk by them. Consider them. Just remember though, when you are investing in a partnership, it is the person first and then the product. In other words, you’ve got to be certain that the person you are going to collaborate with and risk your financial livelihood with has got a track record and work ethic. Then, if you think it’s worth it, share the idea with your board, mentors or other partnerships. You’ll never know the potential unless you give it thoughtful consideration.