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Home » Business And Finance Articles » Partnering For Progress And Growth

Partnering For Progress and Growth

Many home-based entrepreneurs are gaining new ground with partnering arrangements. Although it takes many shapes, the core of the partnering concept is two or more businesses teaming up to achieve together what they can't do alone. Partnering with other businesses can help you offer a broader product or service package to a particular market segment, provide the resources to handle a single major project, or organize resources to meet your customers' needs. Whatever the scenario, partnering gives you the image of seamless capacity typically associated with large corporations.

Even though it has been around for a while, don't expect to find fixed rules for individual partnering agreements. With the concept rapidly evolving, some partnerships resemble entities unto themselves; others parallel outsourcing or subcontracting relationships. Some business owners partner only under carefully drawn contracts; others do it on a handshake. What's important is developing an arrangement that satisfies all parties involved.

Partnering allows very niche-oriented businesses to serve clients' complex needs and to compete against large firms that have all the necessary staff in-house. Partnering also allows you to handle a large one-time project without actually hiring employees.

Another advantage of partnering is it provides a home-based business the opportunity to grow substantially without having to move to a commercial location.

Get It In Writing

While partnering enthusiasts claim there are no serious drawbacks to the process, you should still proceed with caution, especially in the beginning. Formalize your agreement with a detailed written contract that clearly defines each partner's role and responsibilities.

The contract covers what each is responsible for and what the compensation will be. It also includes short and long-term goals. The process of drawing up the contract forces you to think things through and be sure both are on the same page before starting. A business relationship is like a marriage-it takes work and sometimes you have to compromise. Just like a marriage certificate doesn't guarantee a happy relationship, a contract doesn't guarantee a successful partnership.

Even so, a contract can provide the foundation of a mutually beneficial business relationship and give you processes to end the alliance should that become necessary.

Think about all the things that could go wrong and how you would deal with them. What if one of the partners wants out? If the partnership splits up, who keeps the clients? Who signs contracts? How will you handle a situation where one partner fails to fulfill his or her obligation?

Consider the issue of liability not only from the legal perspective but also as it pertains to image. What happens if one of the partners either performs poorly or fails to perform at all? An attorney can review your agreement and advise you so you're protected against legal liability, but you may still be putting your reputation at risk. Take the time to get to know a prospective partner, gain confidence in his or her abilities and reliability, and check references.

Where do you find good partners? They're pretty much everywhere. Clients may also serve as the catalyst for a partnership, or contacts may be made through various networks.

As successful as partnering can be, don't rush into it. Define your niche and your client base, and develop trust with your clients first. Once your business is established on its own, then look for ways to enhance it through partnerships.

Copyright 2004 DeFiore Enterprises

And here is another random article you might be interested in...

Insurance Providers Weather The Storm While Consumers' Claims Flounder

We have just had the first year's anniversary of the flash flooding which occurred at Boscastle in Cornwall. The floods saw some of the worst damage wrought by sudden rainfall in the UK for many years.

The flood was caused by the remains of a hurricane which crossed the Atlantic, collecting vast amounts of water crossing, and was then pushed high above an area inland of the village depositing around 1,500m litres (330m gallons) of water within two hours.

At the time insurance companies were estimating the bill for commercial damage to local businesses, would be as high as £15m.

There is perhaps some comfort for insurers in that it could have been worse. Hurricane Charley, which hit Florida around the same time, cost over an estimated £6bn.

In August this year, just a week after Birmingham was battered by a tornado, residents in Bristol witnessed a twister which was up to 1,000 ft (300metres) long sweeping across the skies over the southern suburbs. The twister swept across a 15-mile area, including the suburbs of Whitchurch, and came close to causing widespread property damage.

Both government organisations and insurers have admitted that with global warming increasing, they have seen an increase in the number of serious weather related incidences.

The Governments environment agency has stated that, "climate predictions also indicate that Britain will be windier. One study suggests 30 percent more gales in Wales and southern England in winter, increasing the risk of another storm like that in 1987, which left £2 billion of damage in its wake."

According to the environment agency, "current estimates are that peak river flows in Britain could be 20 percent higher by 2080. This could have important implications for the flood zones of rivers - in a review of flood defences last year, the Environment Agency found that a tenth of the population in England and Wales now lives on flood plains... The combination of sea level rise with high tides and changes in winds could increase the frequency of extreme water levelsâ€"and hence risk of floodingâ€"in some east coast locations by ten, or even, twenty-fold."

The Association of British Insurers ( www.abi.org.uk/ ) support this view stating in a recent report that, "in the UK, climate change could increase the annual costs of flooding by almost 15-fold by the 2080s under the high emissions scenario, leading to potential total losses from river, coastal and urban flooding of more than $40 bn (£22 bn)."

Some insurers had threatened to start cancelling high risk policies unless the Government invested heavily in providing improved flood defences. As part of cost benefit studies, the Government has introduced new flood planning procedures, which mean that highly-populated flood plains like the Vale of York will receive additional help with defences, but less populated areas may end up with nothing. These measures go some way to helping some of the more highly populated areas against flooding, but do nothing for regions with lower population densities, and provide no protection against other costly emergencies such as hurricanes or acts of terrorism.

A recent report by the insurer Axa warned that fewer than 50% of small firms do not have a plan in place to ensure that their business could survive should they be hit by an emergency or disaster. Axa highlighted that many businesses, especially in the South East, are not covered against environmental risks such as fire and flood, and fewer have any protection against the now high profile terrorism threats.

Following a claim, such as for a fire, or flooding, most household insurance policies will cover the cost of alternative accommodation, if the property is uninhabitable; likewise, many companies have business interruption cover, which will pay the cost of alternative accommodation, however this is not always guaranteed and you need to carefully check the policy wording.

Even if you do have insurance, you need to ensure that it is suitable for your needs. Wherever you obtain your insurance, whether it is from a direct insurer such as Norwich Union, brokers like Endsleigh, or through comparison sites such as Moneynet ( http://www.moneynet.co.uk ), it is vitally important to check all your coverage details. Many people in Boscastle believed that they were completely protected, only to discover after the floods that they had become victims to under-insurance. If the level of cover obtained is not adequate, then insurers may only pay a proportion of a claim, taking the view that you have been under-paying on premiums. Several residents in Boscastle faced insurance shortfalls of up to 50 per cent.

Thankfully in the Boscastle flooding, despite fears from the emergency services, there was no loss of life; however as the fire fighters union fears following the London bombings, exclusion clauses placed into life insurance policies could mean that many individuals do not currently have any cover for certain unpredictable emergency events which are out of their control.

The upshot appears to be that the current situation is one of caveat emptor, or "let the buyer beware". A situation that is likely to get worse with global warming causing increased extreme weather conditions, and rising terrorism threats. At the end of the day, for consumers to ensure they have the correct financial protection, they must actually read all the official cover documents, check the details, and examine all the clauses, when they take out any financial product, if they are not to find themselves out of pocket when a claim needs to be made.