Partnerships are relationships between several companies, IT specialists or companies and the state to achieve common goals.Frequently asked questions: What is a partnership in business? Business partnership benefits?In this article we will help to understand it

A company’s partners can be:

  • Suppliers.
  • Consumers of products (services) produced by an entrepreneur.
  • Companies which provide business services to the entrepreneur (consulting, auditing, training, etc.).
  • The state.

Types of partnership

Obviously, the choice and types of partnership in business depends on the task at hand—obtaining credit or necessary equipment, searching for and hiring specialists.Training and retraining skilled workers, obtaining the necessary raw materials and transporting products, providing other types of business services, etc.In order to monitor the partners’ fulfillment of their obligations, such relationships are formalized legally. We will talk about that in another lesson. For now, let us concentrate on the most common types of partnerships:

Cooperation

Each partner performs his part of the job in a single process: the fabric company makes the fabric according to your order, and you make the clothes out of it.This can be classified as a type of partnership business

Leasing

Leasing is a special type of rental, usually when the object of the lease is equipment. That is, you don’t buy the equipment, but rent it from your partner. You can pay the lessor an extra profit percentage, you can buy the equipment back with time, the lessor can monitor the condition of the equipment himself, etc.

Franchising

Franchising is a types of partnership business when a large company concludes a contract with a small independent enterprise on granting it the right to manufacture and sell certain goods. As well as to provide trade services under the trademark of this company in a certain market. This is how McDonald’s works; the company does not open restaurants in different countries on its own, its franchisee partners do it.

Financing

This is a type of business partnership, in which the partner does not participate in the operating or production activities of the company, but only finances these activities on the conditions of a loan or percentage of the profits.

Licensing

A licensor (a holder of certain rights) grants a licensee (someone to whom such rights are permanently or temporarily transferred) the rights to use the production process technology, a trademark, a patent, etc. in return for a fee or royalty.

Concession

This is a lease by an entrepreneur from the state of economic objects that are monopolistically owned by the state. The object of such lease may be mineral deposits, natural resources (forests, lakes, etc.), as well as plants and factories.

In the Service Centers for Entrepreneurs the latter can receive assistance in accounting and tax accounting and drawing up statistical reports and customs procedures.Support in business applications, legal services, marketing, IT-services, public procurement, as well as consultations in the field of PPP. We’ll talk more about this in another lesson.

Pros of partnership

Collaborating and looking for business partnership form can give you access to a broader range of expertise for different parts of your business. A good partner can also bring knowledge and expertise that you may lack, or additional skills that can help you grow your business. For example, you may be good at generating new ideas, but not so good at selling your ideas. You may be an expert in technology, but you just don’t know how to build relationships and take care of operations. That’s where a partner with skills and insight can step in and fill those gaps. This may be one of your first considerations as you explore the advantages and disadvantages of a partnership.

More cash

A potential partner can bring an infusion of cash to the business. So if you decide to find  business partnership, that person may have more strategic connections than you do. This can help your company attract potential investors and raise more capital to grow your business.The right business partner can also increase your ability to borrow money to fund business growth. It helps to consider these monetary issues as part of the criteria when evaluating a potential partner.

Cost Savings

A business partnership advantages will also allow you to share the financial burden of the costs and capital investment needed to run your business. This can result in greater savings than if you were operating alone.