Here at Meet Hugo, business growth is always at the forefront of our minds, and we’re always seeking new tactics and methods that we can explore to help our clients. One method that can help boost and grow your business that we’re talking about today is business combination. A business combination, or, more commonly known as a strategic partnership, is the relationship between your business and another company or individual. The point of this relationship is to help each other out, and achieve specific business goals through the act of working together effectively and successfully. As if it didn’t already sound appealing, it’s good to note that a business combination can eliminate unnecessary competition between two businesses, and allow for better successes as a result of working together rather than against each other.
What are the three business combination laws?
A business combination can do wonderful things for your company, however, as with everything in life, there is the possibility of failure and it can fall flat on its head. To ensure you avoid the latter, it’s vital to know the laws.
The three business combination laws are essentially rules that you should follow when forming a partnership with another business or individual to ensure maximum success. Often, businesses will form this type of relationship with someone from their network, perhaps unknowingly, and go into it completely blind. Without any expectations or boundaries laid out before diving into the partnership, you simply run the risk of one or more parties being unhappy and the arrangement not working out. So, let’s get stuck in and find out exactly what these laws are!
The first fundamental business combination law is that you and your partner must create more value combined, more so than that of acting alone.
So, this may mean offering your partner something they might be lacking. Perhaps you have certain resources that they can benefit from. All the qualities and skills that each party brings to the table should be shared and dished out, so to speak, allowing for the creation of additional, or better, products and services and an increase in sales.
Secondly, the management of relationships must take place as though it is from one single entity.
Once a strategic partnership is formed, it is important to understand that relationships and significant decisions must be handled between both partners. It’s a good idea to get both of the teams at each business together for meetings to discuss future steps and plans.
This can be flexible, however. Depending on what is being discussed, if one member of the party has more knowledge in that area and the other party feels more comfortable with them making the final decision, this can also happen. This is why it’s important to set out boundaries at the beginning of the partnership, to avoid running into disagreements and any awkward situations further down the line.
Finally, the third business combination law refers to the importance of each partner receiving a fair share in return, to ensure both feel positive about continuing the working relationship.
If one partner feels as though they’re not getting a decent return on investment, it can result in the relationship turning sour and lead them to question the value of the arrangement.