Advantages and Disadvantages of Business Partnership
An effective business relationship is not very easy to develop. That process has to face lots of
ups and downs. Hence, if you are a small business owner, you ought to know about a few of the
basic business partnership advantages and disadvantage.
This will help you to assess whether this type of business activity is advisable for your endeavor.
Your company can introduce itself in new markets and reach customers faster through
partnerships. However, you will also have to withdraw some of the controls over the product and
customer experience according to the roles your business takes with the partnership. You have to
be sure that the two businesses are harmoniously related to each other. You also have to
ascertain that there is an open and honest communication is possible in the executive
management team. This will improve your chance for success and this will help you increase
your revenue instead of wasting resources.
The advantages of business partnerships are as listed below.
The most important reason why many of the companies plan a partnership with another business
is that a new business can be generated. If you have a good partner, your products/services will
be able to reach to your target customers in a better way. If you enter in a partnership with a
company in a different region or country, a small business will be able to progress instantly
across the country and also internationally. The best part of such a partnership is that you don’t
need to develop physical offices and teams in all the places around the world where you can have
Marketing can cost you a lot of money. If you share resources for co-branded marketing
campaigns, you can easily distribute the funds available for marketing and in this way; your
business can be more creative regarding the ways of marketing. The disadvantages of business
partnerships are as follows.
If your product/service gets famous in the market, you will have to share with your partner the
branding and reputation it has earned. Your business partner may not bother to carry out the
customer service as expected by you. Moreover, there are chances that business partnerships
have revenue share agreements or performance based compensation included in the partnership.
These payment processes should be followed and strictly adhered to.
Business partnerships are certainly not always easy. Hence you have to figure out the qualities
you need in your partner before getting any partner for the business.
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