funding is the problem of business growth in Africa, but there are challenges that funding alone cannot solve, they require the collaboration of entrepreneurs from different businesses networking to provide solutions. This is one platform many small businesses are yet to take advantage of because they are yet to see the problems of African consumers beyond their immediate businesses.
Entrepreneurs leverage on relationships with customers to grow their businesses; with financiers to fund the business and with suppliers and distributors when necessary to ensure value is delivered. They consolidate on their relationships with their direct stakeholders, but few consider building a viable relationship with their direct or indirect competitors. Of all the relationships business owners keep, that with competitors is the most distanced and very minimal. Where it exists, it is more of competitors rather than collaborators.
In this era of stiff business competition, and sophisticated customer demand, collaborating with other entrepreneurs have become necessary if businesses will continue to be relevant in the marketplace. This collaborative effort and interaction with those external to your business leads to better ideas and innovative products. The best ideas or inventions are not those formed in isolation by entrepreneurs, but those formed through interaction with others.
No small business has all the expertise, but with a co-operative behaviour, more will be achieved in creating value for customers.
Entrepreneurs who manage various businesses that are interrelated must begin to think of how they can benefit from their relationship with the aim of delivering better value to customers. There are some caveats to this, but first, let’s consider the benefits.
1. Enhanced Business Knowledge:
Collaborating with others provides the opportunity for entrepreneurs to interact and share knowledge regarding the trends within the market. They Learn and develop competencies where necessary.
2. Business Expansion:
When business knowledge is enhanced, it opens up more market opportunities for expansion.
3. Reduction in Cost of Innovation
Big businesses spend so much on research and development unfortunately, small businesses cannot afford such. However, when SMEs collaborate on R&D, they develop new products, increase efficiency and drive down cost.
Collaborative business relationship also leads to additional profits compared to doing things solo.
5. Sustaining competitive advantage:
Competitive advantage is not perpetual. If not nurtured, it will someday be a disadvantage. Business organisations collaborate in order to sharpen and keep their competitive advantage alive.
Collaborative business relationships does not take away the individuality of your business, it simply creates a platform for you to combine your strength in business with that of others to create a superior competitive advantage. To be able to take advantage of collaborative business opportunities, businesses must be set-up to be relationship-oriented.