Business partnership is a business strategy less talked about, most especially for start-ups or emerging businesses. A partnership is a weapon that could help scale a business, or bring a business idea to life–if used appropriately. Almost all successful start-ups started with a partnership between two or more individuals. Apple, Tesla, clothing giants—Adidas and Puma, and arguably the biggest fin-tech company in Nigeria, PayStack started with a partnership. However, the partnership remains underestimated when compared to other business strategies.
A simple definition of partnership by the dictionary says, “It is the state of being a partner or partners”. However, a more formal definition was propounded by many. An example is a definition by Kimball and Kimball, who stated that: “a partnership is a group of men (or women) who have joined capital or services for the prosecution of some enterprise(s)”.
Every year lots of businesses emerge– small businesses or start-ups. Other existing businesses are also expected to grow or scale-up. I believe a key to the success of these businesses depends on their ability to seek and utilize partnerships as a strategy.
In a start-up journey, there are moments and times when a partnership is needed to ensure firm establishment, growth, or acceleration of the business. For example, if a founder lacks or is deficient in a skill necessary for the launch or acceleration of a company or, perhaps, he lacks financial capacity– he might need a co-founder. Existing businesses might also need partnerships to help scale or maintain their status-quo. For example, an existing business might need exclusive access to a new product; it might decide to seek a partnership with another business or start-up to gain such access or rights. However, many business owners or start-up founders are wary of a partnership.
Their concerns are not far-fetched, numerous quarrels and rifts that have occurred among founders in times past would have raised their concerns. Many of such rifts have led to divisions between founders; it has left a bitter taste to mouth (mostly irreparable) and caused chaos within the company. Some have led to a complete breakdown of some once-thriving businesses. Examples of such conflicts in a partnership are the past Allen and Gates relationship battles. Another such conflict was illustrated by Jeff Wald, who revealed that “co-founders issues gave way to contentious legal disputes that caused a particular company to collapse”. These, however, have undermined the importance of partnership and the numerous benefits associated with it.
Advantages of Partnership include:
- Collaborative efforts: It enables brainstorming and sharing of ideas. It also eliminates being solely responsible for the failure or eventual success of an emerging company or start-up.
- More Start-up/Business capital: Financing a business as an entrepreneur is a daunting task. Partnership enables the availability of more capital at the beginning and different stages of a business. With a partnership, running a business and financing capital-intensive assets will be reduced drastically.
- Availability of diverse but complementary skill set and expertise: Imagine a talented marketer and a coder forming a partnership for a venture? Seeking partnership will bring different skills and knowledge together for the development of a business.
- Work-life balance: Sharing of responsibilities may lead to a better work-life balance. Sharing of duties and workload could less work burden and reduce job strain.
- Psychological support: Setbacks are bound to happen in a business or start-up at any point in time. Frustrations and work issues are also inevitable. Partners could encourage each other and brainstorm on ways to solve such problems.
Still, thinking of how to turn your ideas into a marketable product? Or perhaps scale your products to the next level? Reach out to a suitable partner. A better study and a legal partnership plan/agreement are needed to make the partnership a successful one. A partnership is an underestimated strategy for business growth but, it is an important one.