- Joint Venture: When two or more parent companies form an entity together with a business objective, sharing in the risks and returns, and retaining their individual legal statuses. It can be an equal joint venture, in which both parent companies own an equal portion of the entity, or it can be a majority-owned venture, in which one partner owns a larger percentage of the company. A joint venture can help to save money, combine expertise, or enter new markets. It is not a partnership, consortium, or merger.
- Equity Alliance: When one company purchases a specific percentage of equity in another company.
- Non-Equity Alliance: When two companies enter into a contractual relationship, which allocates resources, capabilities, assets, or other means to one another.
- Promotional Partnership: For small to mid-size businesses, advertising and marketing can be expensive. A promotional partner can help you reach a larger audience and promote your products or services, helping to send potential customers your way and allowing you to focus your spending elsewhere. You should seek out a stable business that is complementary to yours, with a client base similar to yours, and create a cross-promotion that targets their customers—those who already trust the partner business. The partner should also be aligned with your company values. A promotional partnership can be a win-win for both businesses. For examples, think about how fast food restaurants promote new movie releases, or how you can get a major credit card with your favorite sports team featured on it.
- Distribution Partnership: A distribution partnership is another type of complementary relationship that is designed to drive sales for both businesses involved. A distributor with an established market can also promote your company for you by offering exposure through joint marketing events or getting you access to customers you may not be able to reach on your own. The distributor does all the work, and your company enjoys the profits from it. The right partner will be an influencer with an existing audience that makes sense for your business and create value that benefits both parties. Examples of distribution partnerships would be a supplement company partnering with a pet product distributor, or an agreement between a technology provider and a video security company to roll out a new offering in a new region.
- Cause Partnership: Consumers embrace the idea of companies championing socially responsible causes. A 2014 Nielsen study reported that 42 percent of North American shoppers would pay extra for products and services from companies committed to positive social and environmental impact. Find a social cause that will capture your audience and partner with a local organization or nonprofit that is aligned with your company values. It can be a consistent long-term partnership, support through the sponsoring of an event, or donation of a percentage of sales. This will increase your exposure in a positive way and help your business grow. Also, as your company becomes associated with promoting a good cause, it will help it stand out from the competition. Social media is an effective tool for engaging people in your cause and spreading the word about issues they care about while giving your brand higher visibility, attracting new customers for you while benefiting the partner organization. Examples of cause partnerships would be an airline enabling their customers to donate their travel miles to a nonprofit company, or an outdoor clothing retailer donating a percentage of all sales to an environmental group.
- Competency Gap Partnership: As a business owner, you don’t have to do it all yourself. Look for any gaps or weaknesses in the competency of your company and outsource tasks that you are not doing well or efficiently. This can save you time and money, and strengthen your weakest areas by having an expert handle it. A competency gap partnership will give your business much needed resources so you can focus on advancing other areas without slowing down any possible growth, building a stronger brand, and keeping your business competitive in the market. An example of this would be outsourcing accounting, IT, or human resources to offload administration and fill in gaps in workload imbalances.
Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com
Europe: Michael Lawrie at +44 (0) 161 359 4400 / Enquiries@BenchmarkIntl.com
Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com
ABOUT BENCHMARK INTERNATIONAL
Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $6B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.