Out of the various different small business growth strategies that one can use, a business alliance is almost never considered. Most of the business owners believe that the alliances are only suitable for the big business but that is definitely not the case. They are really beneficial for a small company as access is gained to a new market, aiding everyone involved to capitalize on higher profits.
According to Todays Growth Consultant, the businesses that do share resources will be able to gain a higher efficiency. This automatically means that they become more profitable.
It is interesting to highlight that there are various types of business alliances that you can take advantage of these days. We will only highlight some of them and recommend that you learn all that you can about the others that do exist.
This is a quite common contractual agreement where a new entity appears in order to carry on the business or trade separately, without the effect of the core business. Companies come together in order to share profits, funds, markets and knowledge. The larger company usually decides to form joint ventures with smaller companies in order to gain vital technology, intellectual property or other resources.
Separate entities are usually not created. The companies involved will engage in various joint activities but business or trade is still carried on alone. Partners will offer necessary resources like distribution channels, capital equipment, manufacturing capability, distribution channels, expertise and intellectual property. Autonomy is maintained by all parties.
These are legal agreements between 2 parties where both of the parties will agree in sharing losses and profits. As an example, one firm that mainly sells ads and produces coupon circulars will partner with printing companies. Printing companies that have expertise but a limited printing volume will agree to the deal since both parties gain something.
Marketing alliances are agreements in which the companies will share resources and costs in order to promote each other. In most situations the target markets are the same but the services that are offered are different, usually complimentary. Alliances can be formed based on informal or formal agreements.
Find The Perfect Partnership For Business Growth
You need to basically analyze all the options that you have access to when you are thinking about growing your business. That is something that many do not consider due to the fact that they want to do everything alone. Look at the potential business partners that you can locate at a local level. This helps to promote your services better and at the same time, when executed properly, an alliance will help a business to achieve a level of growth that would not be possible alone.