The Power of Business Partnerships

Running a successful business is all about collaboration. Whatever the business type, the smooth running of the company relies on lots of moving parts working in harmony. Everyone has their own role, and each is crucial for the business.

But businesses can also be strengthened by collaboration outside of its internal structure. Partnerships, alliances and even joint ventures with third parties can be hugely valuable and beneficial. They can help organisations to grow, innovate or even pivot in a whole new direction.

Below, we’ll run through some of the main advantages of business partnerships. This includes what this kind of arrangement looks like and why it's important. And just as crucially, the reasons that business partnerships can fall apart.

What are business partnerships

A business partnership is a relationship with a supplier, contractor, freelancer or other party. It can even be a collaboration with another complimentary or adjacent brand. These relationships all have something in common though - they have a strategic purpose, and help the company meet a particular business objective.

Examples of business partnerships include:

• A technology company working with a debit/credit card provider to facilitate mobile wallet payments
• A fashion company working with a celebrity or influencer to promote an exclusive product line
• A manufacturer working with a supplier on an exclusive contract.

The nature of this kind of professional relationship has evolved somewhat over the last few decades. It used to involve a formal agreement, perhaps an exclusive contract between a business and its suppliers.

But over time, these partnerships have become more fluid and flexible. In the modern business world, there are more examples than ever before of strategic, dynamic and even surprising partnerships. These are collaborations that shouldn’t work on paper, but actually bring impressive and innovative results. This mainly happens in the worlds of marketing and branding, but it does also take place in other industries.

One of the most important types of business partnership is between global partners. The world is getting smaller and more connected, and many brands are branching out into international markets. Having strategic partnerships located exactly where you need them is crucial in today’s globalised world.

Why are partnerships important in business

There are a whole host of reasons why partnerships and alliances are important in business, especially for smaller companies looking to expand into international markets.

Let’s take a look at just a few:

• Provide access to new markets. The right strategic partner can act as a gateway or entry point into a new international market. A prime example is financial technology companies, who may have to wait to get a banking licence in a new country. But by working with an established, licensed bank in that country, a fintech can get a foothold and offer some services there.
• Unlock new technology. With access to a partner’s technology, a brand can add a whole new dimension to their product or service offering. For example, a laptop brand which teams up with a microprocessor company to add a new, more powerful processing chip to their latest product line.
• Foster innovation. Some of the best collaborations between brands produce exciting, innovative and creative results. This could be through bringing together talent and expertise in different fields, or by a more unusual collaboration between brands in completely different industries.
• Mitigate risks. By collaborating on a project or working long-term together, two companies can share the risks. This kind of relationship can be formalised, so that each party takes on their own share of liability.

Ultimately, partnerships can make both participants more resilient, which is crucial in these challenging economic times.

Building stronger networks

So far, we’ve looked at business partnerships primarily in the context of two companies working together. But the strongest businesses have embedded themselves in the centre of a robust professional or commercial network. This will involve a number of business partnerships, each bringing mutual benefits.

By working with business partners in a specific vertical, you can even gain a better insight into pricing and priorities in a different industry. This is hugely useful for companies looking to enter new markets, especially in other countries. It can also help with talent and supplier sourcing.

Why business partnerships fail

Of course, business partnerships don’t come without their challenges. Not all organisations are compatible. If there’s a clash of cultures or ethos, or perhaps strategic vision, the partnership can fail.

Partnerships can also break down over broken promises, miscommunication or mismanaged expectations. This is why it’s always a good idea to put the time into finding the right fit before embarking on a partnership. Even more importantly, you need to establish and agree upon targets, responsibilities and deliverables in writing.

Both parties need to benefit from the relationship, so sharing opportunities and the ability to compromise will be needed. You’ll also need to actively manage the relationship, which will require skill, diplomacy and expertise.

Conclusion

Most companies wouldn’t survive without business partnerships, or at least wouldn’t be where they are today. These relationships offer so many benefits, from fostering innovation to providing access to a whole new customer base. They can help businesses become more resilient, mitigate risk and enter new global markets.

If you’re a UK business with your sights set on overseas expansion, you’ll need to take advantage of strategic partners and clever tech solutions. One of these is Wise Business, which lets you pay partners, suppliers and staff in 160 countries in 40+ currencies.

With Wise, you can securely send money worldwide for low affordable fees and mid-market exchange rates. It could work out much more cost-effective compared to using a bank.

Your organisation can save time as well as money with Wise Business. It has a clever Batch Payments tool to simplify payday - you simply need to upload a .cvs or .xls spreadsheet, and Wise will do the rest. You can even automate the payment process using the powerful Wise API.

And for managing expenses, there are Wise cards for spending in multiple currencies both online and offline.

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