I’m often asked: Why is collaboration is good for business? and so thought it sensible to share my thoughts:
As a Entrepreneur / Business Owner your dedicated to the significant and sustainable development of both you and your team, right?
You are prepared to get up early and return home late, to make and ensure your business is a success. And it doesn’t matter whether your relatively new to running your own business. Or a seasoned professional. When push moves to shove, and the deadline is looming. You are the one that inspires the team to work harder, dig deeper and pull out the required results. With all this going on, I’m sure collaborating with others is the very last thing on your minds?
But hang on…
The old adage:
The dream works, when the team works
ONLY works through collaboration! You and your team working in unison to achieve outstanding results. So why would external collaboration work any differently?
Let’s briefly take a look at the differences between JV’s and Partnerships
There are several joint venture (JV) formats that are available to business people. Typically, a joint venture will include the signing of a non-disclosure agreement to keep deal terms confidential. The two formats that are considered joint ventures are a limited co-operation, and a separate JV.
With a limited co-operation JV, the idea is that two organisations (or people) are agreeing to cooperate for a period. This could be for a small test venture perhaps where one party will produce and sell a product and the other receives a revenue share. Here, a contract is drawn up laying out the agreed terms and what conditions apply to the limited co-operation JV.
With a separate JV business, a formal business structure like a limited company might get registered to conduct business between two organisations (or people). There will be a share ownership distribution and agreements on what each party is responsible for. These are useful to formalise a larger agreement where a limited co-operation joint venture would be insufficient. Keeping the deal under a separate limited company also provides protection for both parties separate to their main companies which mitigates risk.
Partnerships for long-term arrangements
Partnerships are designed for at least two people (or organisations) that team up for a business and are usually active within the business (‘sleeping’ partners can exist too). Records are kept by each partner on income and expenses incurred within the partnership. Each partner manages their own tax liability with the HMRC and files for Self-Assessment; there is no Corporation Tax like there is with a limited company.
There are three types of partnerships: ordinary, limited, and limited liability partnerships.
An ordinary partnership is a simple agreement between the parties. It’s not a legal, formal structure but it must get registered as a partnership with the HMRC. Should one partner leave or pass on, then the partnership is dissolved but the business may continue outside of the agreement.
Limited partnerships comprise limited partners and ordinary partners. The partnership must be registered with the HMRC but usually doesn’t file annual returns as a partnership. With limited partners, their liability is restricted to what’s they’ve invested into the business and guarantees made regarding obtaining finance.
With a limited liability partnership (LLP), it’s a more formal structure. An LLP is taxed as a partnership and has similar limited liability protection as a limited company for the partners. Registering the LLP with Companies House along with filing accounts and annual returns is part of the responsibility of designated members of the LLP.
Professional guidance on appropriate business structures
Whether you’re going full corporate in your ambitious goals or you plan to stay fairly small in organisation size, there is room for several organisational structures. It’s important to consult with qualified solicitors like Virtuoso Legal to discuss your options in more detail and get help setting up correctly before going into business. This way, you’re on solid ground from the outset.
There are clear differences between both partnerships and joint ventures. Sometimes the differences are subtle and other times they’re clear and distinct. Choosing the appropriate structure for your business venture is important because it affects many aspects down the road such as legal protections and levels of taxation. It also helps to take your time with the decision because it’s not a simple matter to change structures later.
Mastermind
Mastermind, is a fabulous way to benefit from the knowledge, experience, background, connections of other like minded business owners, WITHOUT need, or prior to; entering into any form of JV or Partnership agreement. It is a means of gaining access to others and their expert knowledge and experience, on a “giver’s gain” basis.
Mastermind is by no means a new concept, and has been documented since the Mid 1930’s whilst Napoleon Hill, a researcher for Carnegie by interviewing 250 of the top Business Owners in the world. To his surprise, what he quickly learned, was that rather than these incredibly successful and powerful business owners keeping everything very close to their chest. Instead, they were very open and frank with their advisory team. Sharing knowledge and expertise was not only encouraged but expected.
You don’t know, WHAT you don’t know
If we acknowledge none of us know everything. And yet it is often the things we don’t yet know, that prevents us from having the competence and confidence to make the relevant decisions, changes and advancement within our own lives and businesses! However, those who recognise this, often seek out knowledge, either through courses or coaching.
Mastermind accelerates our learning 10 fold, by asking us to share our knowledge with others, in return for them doing the same. It allows a team of highly dedicated and proficient business owners (just like you) but with differing backgrounds, experiences, qualifications etc to support you in overcoming whatever hurdles you may face. Which is currently the bottleneck to transformational growth within both you and your business.
And, by us ensuring nobody in each mastermind group is in direct competition with each other. Each member can work openly in sharing their own concerns, whilst helping others to resolve theirs!
Still not convinced?
If you are not convinced that collaboration is really worth the time and effort, here are five reasons you should care about collaboration in your business:
Collaboration Will Inspire You
It is easy to get into a routine during the day-to-day operations of your business and forget that there may be a better way to do something, different techniques to try, and new tools that can save you time and money.
While you can read blogs, magazines, and books for inspiration, if you are not communicating, sharing, and discussing that information, the benefits are limited. It is vital to get outside of your own head to get a fresh perspective, trigger your creativity, review incoming information objectively, and add new context to the data you are gathering so you can use it effectively. Going beyond what you do and see each day to explore collaboration can be inspiring and help you think in a new way.
Collaboration Helps You Grow Your Network
Successful entrepreneurs have a common interest in meeting new people and building a list of contacts and colleagues. Being successful in business requires that you consistently make connections and form alliances. Imagine how your business would dwindle if you continued to network with and sell to the same group over and over again.
While every contact you make may not result in collaboration, every time you reach out to someone to explore the possibility, you are expanding your network.
Collaboration Is Educational
One of the biggest benefits of collaboration is the opportunity for learning. In fact, every interaction you have with someone outside of your immediate circle can teach you something valuable. Some of the most successful collaborations involve two professionals who bring two very different skill sets, perspectives, and strengths to the table. When this happens, you are certain to be surrounded by learning opportunities.
Collaboration Can Help You Save Money
Many collaborative relationships involve splitting intellectual contribution, hands-on work and, sometimes, expenses. If you collaborate with another business and part of the terms involve sharing development and marketing expenses, you can double your budget while reducing costs.
In this case, you can be fairly certain you will be getting a bigger bang for your buck than you would be if using only your own resources. Provided all of the parties involved are equally invested in the success of the collaboration.
For example, a company might share space with a complementary partner, then co-market their participation. This can attract more foot traffic and add resources to enhance the experience visitors have at the booth.
Collaboration Solves Problems
There is a reason crowdsourcing is so popular; there is an undeniable power in numbers. If one person can’t accomplish something on his or her own, two or three or more people may be able to get it done.
Think about the last difficult problem you faced in your business. When we get stumped, most of us immediately go to a partner, mentor, or other trusted resource who acts as a sounding board and helps us work through the problem. The harder the problem is to solve, the more we can benefit from getting the input of someone outside of the situation. And when you add new viewpoints and experiences to the mix, the end result will often transcend what you originally set out to accomplish.
Collaboration in Action Is Win-Win
One wedding caterer became a valuable one-stop shop for couples. By hosting tastings that let its dishes be sampled while introducing local wedding planners, photographers, florists and location specialists.
A gym owner proposed becoming a trial location for an exercise equipment vendor. Saving the owner the expense of purchasing the fitness machine and giving the vendor a place to send prospects wanting to try it out.
A coffee shop placed a fresh floral display at its entrance. Giving promotion to the florist a few doors down while enhancing the ambiance of its establishment at no cost.