With trading conditions as difficult as they currently are anything that can help to safeguard your business would seem like a good idea.
One such suggestion is to collaborate with another business.
A successful collaboration will depend on several things, which can be summarised as doing the careful research before you go ahead:
- Are the two businesses a good fit, in other words are they genuinely complementary
- Do they share common values and ideals
- How sound are the finances of those involved
- How much will the set up costs be
- Don’t overestimate the time and money saved and the potential profits
Individual businesses can face several limitations when trying to compete in global markets. This may include scale and expertise.
So there may be financial benefits to collaboration in enabling the partners to tender for larger contracts and to benefit from a wider range of skills among the companies involved.
Swapping skills can also be highly valuable and cost-effective for start-ups on a budget.
Joining forces to cross-promote each others’ products or services can be a powerful way to build awareness and break into new markets.
Here comes the note of caution: the false assumption that the more employees collaborate, the better off the company will be. In fact, collaboration can just as easily undermine performance. The problem is not the collaboration itself but determining when it makes sense and, crucially, when it doesn’t.
In summary, be very clear about the costs and the projected return, when setting up the collaboration.
In other words, do the research carefully and then make sure there are formal documents of the details of the collaboration and the roles and duties of the businesses involved.