Strategic Alliance: Supercharge Your Business Growth with the Right Partnerships
Givens LLP | January 18, 2023
Companies both big and small often form strategic alliances and partnerships as a fundamental part of their business plan. However, while many of these partnerships are created with high hopes and expectations, not all of them prove to be successful.
In business, partnerships and alliances are a form of networking. They can bolster abilities and make up for shortcomings by joining forces with other companies that have complementary strengths. They can also give businesses access to products or services they otherwise wouldn’t have, increase customer loyalty when they partner with businesses that are already a trusted name in the marketplace, or even help them to enter a new market. These alliances are collaborations where two or more organizations come together to pursue a unified aim while preserving their own autonomy. But why are alliances and partnerships so important for business growth, and what kind of partnerships should you be aiming for in order to achieve maximum scalability?
What are Strategic Alliances & Partnerships?
A strategic alliance is a partnership between two businesses to pursue a common goal while still maintaining their own individual identities. This type of agreement is less complicated and less restricting than a joint venture, where two companies join forces to build a completely new enterprise.
Companies can maximize their talent and individual strengths by collaborating with other organizations within the same – or similar – industry. Everybody and every company has strengths and weaknesses, so developing your partnership plan to capitalize on those strengths and compensate for the weaknesses can help you stand out.
Different Types of Strategic Alliances and Business Partnerships
Strategic alliances can assume a variety of shapes and sizes, but typically they can be classified into three distinct areas.
A joint venture is a business entity created by two or more parent companies. Resources and ownership are divided between the participating companies, with a legally binding contract in place to ensure compliance. The joint venture can be formed with a short-term goal or long-term strategy, and the profits are distributed between the parent companies.
An equity alliance is established when a company acquires partial ownership of another business, or when both companies mutually invest in each other by purchasing equity shares. Equity alliances allow companies to combine resources, mitigate risk, and access new markets, customers and suppliers. They provide a range of strategic benefits that can help companies grow and succeed in today's competitive business environment.
When two organizations enter into a non-equity alliance, they are simply creating an agreement to exchange assets without forming a new venture or dividing ownership. These kinds of alliances are usually more lenient and casual than those that involve equity, and it is the most common type of business partnership.
- General Partnerships
When two or more proprietors team up to operate a business, the default business organization they form is a general partnership. This is in the same manner that a single entrepreneur automatically establishes a sole proprietorship.
- Limited Partnerships
A limited partnership is a type of business that has a unique financial and legal setup. One person – the general partner – is in charge of running the company, while the other people involved – the limited partners – provide the funds but are only liable up to the amount of their initial investment.
- Limited Liability Partnerships
With Limited Liability Partnerships (also known as LLPs), those involved in the partnership arrangement have their liabilities restricted to the amount of money they have invested in the enterprise.
Accountants & Bookkeepers: The Partnership to Help You Scale Your Business
As we’ve seen, there are many different types of strategic alliances and business partnerships to help you scale your business, but no matter where you are in your entrepreneurial journey, there’s one dream team your business shouldn’t do without: accountants and bookkeepers.
When you hire a partnership made up of expert and knowledgeable bookkeepers and accountants, you’ll have a team of tax specialists and accounting professionals ready to help you minimize your tax, maximize your credits, and scale your business to heights you never dreamed possible.
Recruiting such an accomplished team to manage all your bookkeeping and accounting needs will not only save you money, but also provide you with more time and less stress – especially during tax season! If you want your company to grow and scale, it’s good practice to hire a partnership of both bookkeepers and accountants who can work together to provide your business with the financial knowledge, guidance, and assistance you need to reach your goals.
In short, creating alliances or partnerships with other companies in related fields can help drive business to you and vice versa. A partnership or alliance could mean that your company gains access to new products, enters a new market, blocks a competitor (via an exclusive contract), or increases customer loyalty.
If you’d like to learn more about creating partnerships and alliances to help grow your business, download the Givens Growth Guide today, your one-stop shop for secret tips and tricks guaranteed to help your business flourish.