Other businesses have been able to pivot for survival, overhauling their service offering in some cases, or moving online to reach customers under ongoing lockdown restrictions. The pandemic has forced many of us to take a step back and think about what is important in life, and as a result, some have taken the plunge and started their own businesses.
These are just a few COVID factors that I believe have created more opportunities to collaborate and work with other companies to take full advantage of the rebounding economy.
There are a multitude of reasons that can cause a company to decide to collaborate with others. For example, an entrepreneur may be trying to launch a new product or find a new path to market, and although he has some ability to get there, he lacks what he needs to cross the line. They might consider hiring staff or buying a subcontractor, but that involves a degree of investment that might not be feasible at this point in the business cycle.
Collaborating with another company might be the perfect solution. Why not join with others and make the whole greater than the sum of the parts?
There are many models that allow companies to collaborate to reach the market and generate profit. Setting up a joint venture is one, where two or more companies come together to work together to achieve a particular goal.
Another example could be a company that wants to start exporting and decides to partner with another company that is already doing so with a different product. You might have two complementary products that may be best sold together, like gin and tonic, or cheese and cookies, for example.
While business collaboration is popular in the food industry, there are also many opportunities to do so in technology, construction, engineering, and others.
Collaboration can be an overwhelmingly positive step for many businesses, but some tend to shy away from it for fear of having ideas stolen or missing out on a fair share of the benefits over their contribution. They may even view other businesses as competitors, which can create reluctance to reach out in the first place.
This is why it is essential to seek legal advice when considering a business collaboration – to make sure that the right documents and agreements are in place to prevent either party from being duped or launching out. into something that ultimately won’t suit his business.
Lawyers can also get involved early on to help identify appropriate collaboration opportunities, as well as to enter into confidentiality agreements when entering into discussions with a potential new partner.
This can be especially helpful for those who know they need to collaborate in some way but don’t know how to move forward. For example, if someone has developed a new manufacturing process or technology that is not necessarily part of their core business, but wants to bring it to market, another company may be looking for that thing.
In this scenario, we would work with the two companies to create a license agreement to ensure that the people who developed the process or technology could benefit from another company’s permission to use their invention.
There are three key steps to business collaboration: identifying what your business has to offer and making sure it’s properly protected; find a safe space to discuss and agree on any potential partnership; and the formulation of the partnership to ensure that it is legally binding. Never enter into a collaboration without a clear understanding of what constitutes success and well-defined rules set out for working out what happens if things don’t go as planned or someone wants to come out.
If you are a business owner who thinks collaboration can be a good step, my advice would be to seek legal assistance as soon as possible.