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What Is A Partnership?
A partnership is a formal agreement between two or more entities to oversee business operations and share profits and liabilities.
Creating strategic partnerships with an existing business can be a huge win for a startup.
This is considering that a partnership creates a new slate of future options for your startup.
On the other side, pursuit of partnerships could suck up a ton of time, and bunch of resources, and fail to materialize.
Therefore, entrepreneurs need to do proper research and evaluate the possibilities of achieving success through partnerships.
Partnership Key Takeaways
- Search for brands, businesses, or products that complement your business offerings
- Find a partner with similar company values
- Look to expand your network
- Partner with small businesses and focus on pooling resources that bolster your ability to innovate and market
Understanding How Partnerships Work
Many entrepreneurs make the mistake of thinking they can do everything on their own. In reality, other businesses (even your competition) and members of your community can be a huge piece of your growth strategy.
When forming any type of partnership, a lot of energy and time can go into this. To ensure it's worth your while, dive deep into the vetting process and ask yourself (and them) the following questions:
- What are your business's values and priorities?
- Who are your customers? What matters most to them?
- In what ways can we both bring value to each other's businesses? Cross promotions? Clout/credibility?
- Should we do a trial run first to make sure this partnership works out before finalizing an agreement?
- What will the agreement look like?
Once you have an idea as to what the ideal partnership agreement looks like, that's when the outreach begins (the hardest part)!
Here are some different ways you can meet other entrepreneurs and form partnerships:
- Simply talk to other people in the industry. You'd be surprised as to how willing other entrepreneurs are to share their knowledge with you
- Host an event: By inviting people to your event in your community and industry, you may be able to form partnerships and expand your clientele
- Join a Facebook community: Nowadays, everything is online. A great way to meet other people is to become 'active' on a public forum or community
- Use other social networks such as LinkedIn or Twitter to aid your outreach. This can be a very powerful tool if used properly.
Forming partnerships and building relationships within your community can be a very valuable tool, but it's important that you do your due diligence and avoid going in blind to any sort of partnership. This can save you months, if not years of time.
Real-World Examples of how Partnerships Work
1.N26 and TransferWise
German Neobank N26 is no stranger to the power of strategic partnerships.
The non-bank financial institution has partnered with the global technology leader in international payments transfer TransferWise
Through the partnership, with TransferWise](http://www.wise.com/) N26 customers can now make international money transfers in more than 3o currencies. Creating an easier money transfer experience with a clear transaction fee would not be possible without forming such a strategic partnership.
2. IBM and Galvanize
The partnership between IBM and Galvanize culminated in a new Machine Learning course that started to familiarize students with the IBM's suite of Watson APIs. The strategic partnership saw the two companies getting something out of it.
Galvanize capitalizes on the IBM Bluemix Cloud Platform to reach a wider audience. On the other side, IBM takes advantage of Galvanizes data science and developer curriculums and a deep community of students, startups, and instructors.
How To Form A Business Partnership
- Determine your requirements and clarify what each side needs to deliver upfront
- Set terms and consider every possible condition from the beginning
- Be prepared to nurture relationships and work well together
- Explore new opportunities
- Make sure your entire team is involved
Partnerships are often tricky to establish and maintain. However, some are extremely successful. Use different social networks such as LinkedIn or Twitter to aid your outreach, and find the best partnership opportunities.
A business- and employment-oriented social networking service that operates via websites and mobile apps.
Businesses using LinkedIn:
An online news and social networking service where users post and interact with messages, known as tweets.
Businesses using Twitter:
American online social media and social networking service company based in Menlo Park, California.
Businesses using Facebook:
Contributors to this article:
- David Gitonga, Writer @ Starter Story
- Samantha Walls, Head Of Content @ Starter Story
- Pat Walls, Founder @ Starter Story
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