A small management consulting firm would do well by partnering with another business in order to expand the firm, gain more market share and increase revenue. A partnership helps the consulting firms earn greater revenue is several different ways.
1. Economies of Scale
By joining as a partnership, the firm can order in bulk as need for resources will be greater, earning them discounts on bulk purchases. Furthermore, with expansion comes lower average cost and economies of scale which ultimately lead to a greater revenue earning.
2. Greater Client Base
With two consulting businesses joining together, the client base will be combined and the clients can be offered the services of the other firm as well. For example, the management consulting firm does not help the client in the actual execution of the advice, but with the new partnership, the IT side of the business could help with the execution, earning more revenue in the process. Similarly, the management side could offer advice to the client the IT firm already had and gain more revenue in that manner.
3. Competitive Edge
With the two firms partnering together, they will have a competitive edge that they did not possess earlier as small business and this will help expand the bottom line in creative and innovative ways. With the bottom line increasing innovatively, more revenue will be able to be brought in.
4. Combined Resources
With the incorporation of the two previously small firms, both will able to use the assets and resources of the other firm and use them in an a way that would bring benefits to the partnership as a whole. They will have extra abilities combined that were not available to them previously, and with those extra abilities, they will be able to work out new ways to earn more revenue.
5. More opportunities for tax planning
With their businesses and assets combined, they have more options of tax planning so that they may be able to retain more of their income after tax and gave greater revenue than would be possible otherwise.
6. Access to more capital
With greater capital come greater opportunities and greater potential to earn. In this manner, the partnership will be able to increase their revenues by making use of the excess capital they have.
7. Client Loyalty
By gaining client loyalty through the work of both firms, the bottom line will be improved and costs of acquiring more clients will be low. This will help keep generating revenue, while bringing in new clients and also improving the bottom line.
8. Growth and expansion
Having grown by forming a partnership, strengthening the bottom line and earning increased revenue, the business will keep growing and be prosperous. This growth, led by the partnering of the two firms, will lead to further increases in revenue generation.
9. Reducing risk
When firms that can work well together on a single project partner with each other, it reduces the risk of the project falling through or failing. This reduction in risk reduces cost and assurance that the project will succeed brings in greater revenue for the firm.